I agree! It can be done well, and it often makes a lot of sense. I have used this strategy as a manager, and was able to extend the (US East Coast) business' hours to accomodate the West Coast customers, without having to create a second shift, and possibly have to pay more in salary to have people work the late shift.
I myself have done this kind of work as a consultant for a UK company, serving their US customer base. It worked out fine.
However, as mentioned above, it does require the right kind of person. I would emphasize the self-discipline aspect and the trust issues more than the social butterfly vs lone wolf aspect. Evaluating the performance of a remote rep is probably the most challenging thing. But through the wonders of technology, it is possible to give a thorough evaluation of a remote rep's work.
Like with the in-house reps, the hiring is the most important thing. When you hire the right people, everything else falls into place a lot easier.