No - they have been serving houses for decades and decades without any issue at all. The issues though are with all the modern fittings and fixtures, outlets, appliances and then the clients requirements etc is, as you have seen, the flow and pressure from an open vent gravity HW cylinder isn't suitable and that's where the pump comes in. Don't forget the cold water cistern(s) in the attic will create significant noise when filling and that may affect your decision to retain them when the loft is converted.But are they a bad idea?
If you are happy to work with a HW system pump and the noise that comes along with that and ensuring that the cylinder is setup and configured/and laid out properly, it can work very well. 1000's of people use that setup quite happily today and it can be serviced by individuals without the need for extra quals.