For PvE, absolutely viable. Your kills will be a little bit slower, as Disc Priest damage isn't great compared to a pure DPS class, but you will hardly have to worry about direct healing. I've not run a team like that myself, but have 2 5 man teams with Disc Priests as the healer; and they mostly healing through Atonement, and I have no real problems.

BG's has it's own complications, working around not having /follow will be your first challenge, if you are fine with that part, then just remember that healers tend to be targets, but if you are good at PvP then it's just a matter of coordination.