I think if you go into it with your eyes open, accept the risks and know that the level of repair meets your standards then technically there's nothing wrong with it.
I've been running a Cat D E60 530d for nearly two years now and it hasn't imploded or spontaneously combusted.
However, a couple of things have come up since I've been running it which confirm that it wasn't the best of purchases.
The front brake pads are slightly the wrong size. It passes the MOT and BMW have told me that it's not the end of the world and that they don't need replacing. However, it doesn't reflect well on any other repairs.
The nice man from BMW has also pointed out that the front of the car hasn't been repaired 'by the BMW book' — something simple he pointed out was that they used the wrong rivets.
If my dad had known it was a Cat D he probably wouldn't have bought it and if I had known I would have strongly advised against it.
So in a nutshell — I'm driving a Cat D at the moment and no, I wouldn't by one.