In my Nexus One days I regularly used a Class 10 32GB MicroSD as my primary application storage. I can't say that it was great for performance, but it was done out of necessity (the N1 had 512MB of internal storage total - so closer to 200MB available for apps and their data) and it worked mostly fine. I formatted a ~16GB partition of the card to ext4 and essentially symlinked that partition to /data. It was a messy hack, but it did work just fine.
I wouldn't do that unless you absolutely needed to (like if you don't have much storage available), but it is a perfectly workable solution - just make sure that you use a fast (Class 10 or so) card.