I seriously doubt it. You only remove 1 extra request with this technique. The main advantage is that you don't have to maintain a sprite image (but using this without some tool would also be cumbersome).
IMHO one saved request isn't work doing the same thing twice. And MHTML (http://www.phpied.com/mhtml-when-you-need-data-uris-in-ie7-a...) doesen't come as a saviour either, as you have to duplicate all images in the CSS, which increases the size of the CSS significantly (if it doesn't you are probably better off using "old fashioned" techniques.
in defense of the technique: Parsing an existing CSS file, extracting the images, base64-encoding and embedding them is something that's very easily done programmatically and a script that does this on deployment is very easily created.
Assembling a huge sprite image and emitting offsets is harder. Still very doable though, of course.
One additional downside is that sprite atlases are annoying when you need to tile the image. Vertically repeating images can't be in the same atlas as horizontally repeating ones. X+Y repeats each need to be in a separate image altogether.
I'm also wondering if, to correctly emit the offsets in CSS attributes in all cases, you'll require some manually inserted placeholders.
Are there specific game engine tools that could be re-used for web work? It's a rather tedious process at the moment, pulling out sprites and arranging them on a sheet. Keeping them updated and so forth.
IMHO one saved request isn't work doing the same thing twice. And MHTML (http://www.phpied.com/mhtml-when-you-need-data-uris-in-ie7-a...) doesen't come as a saviour either, as you have to duplicate all images in the CSS, which increases the size of the CSS significantly (if it doesn't you are probably better off using "old fashioned" techniques.