You usually want to decrease the amount of operations going over the network for NFS. Check your mount options and analyze if you can increase the time things get cached. This is specially important for web servers. We run a fairly intensive NFS environment where the web servers usually do very little read/write but a lot of meta-data (check file timestamp, permissions, size, etc). You can tune how long that information stays cached and it'll improve performance.
A downside is that you've a single point of failure being the NFS server. If you can't make it a active-active or active-passive cluster, make sure your backups are being done on a regular basis and can be restored quickly. Another approach is to make sure the NFS server itself doesn't have single points of failure within it (eg. RAID-0 is a no-no in this situations). Assess your risks accordingly.
As far as if it works or if it's a common setup: it works and it's common so you're not running anything crazy at all.