Why not? I use a similarly spec'd 12", 1440x900, 1.8ghz Lenovo X200s. Sure I dock it and connect dual monitors when I'm at work, but having that resolution plus being able to cart it everywhere and pop it open without hassle makes it a great dev machine. I was able to compile our whole Java webapp, maybe a million lines of code, in the same time as my previous machine - most likely IO was the limiting factor not horsepower. What kind of compilation or other intensive work do you expect to need to be doing that would offset the portability benefits?
I do the same but with an x200. It kicks ass and I do Linux kernel hacking on it all the time. Compiles a full kernel in 15 minutes. It also has a 128GB ssd like the air.
