About 10 years ago, during the early days of Priceline when bonus money was abundant, a guy in San Francisco did this simply because it was WAY cheaper than renting or owning in San Francisco. The local news there did a story about him. He would typically make a series of bids and end up in the Hyatt Regency San Francisco for 6 weeks at a time for like $40/night or something. At that time Hyatt was still giving GP points for Priceline, so he was Platinum and the hotel kept him on the Regency Club floor. A sweet deal.

Airports typically have the best Priceline deals, so you could really do this as you describe, and save lots of money, especially if you're in an expensive area.