its a good idea in my opinion and on it's way to becoming standard in certain parts of the world. it has value from a sustainability perspective. the LEED program offers credits for such innovation.
one pitfall is the level of treatment the approving agency (AA) will require and the perpetual monitoring the AA may expect. another thing is delivering or storing the 'product', you may need pumps, tanks, fitration/disinfection etc. which require maintenance and can be costly.
they've been doing this type of recycling in europe and the carribean for years. you should have no problem finding case studies on the net.