I wondered how large the scallop cusp heights would turn out to be, so I plugged some numbers into my equations. The answer is - surprisingly small!
Using figures from Andrew's post above - 25mm diameter stock with 18mm spanner flats, a 10mm diameter cutter and 1 degree angle steps - the cusp heights go from 0.0015mm near the centre to 0.0029mm near the edge of the face. I don't think many spanners would complain about that.
Larger cutters reduce these heights further, and it should even be possible to use larger angle steps and still get good results.
I've attached a simple spreadsheet for anyone who wants to play with the figures. This a zip file containing a .xls document. If you have any trouble with it, please let me know.
So it looks like the technique is viable, in theory at least. Now we need to see how it works in practice, so, Andrew, over to you

The generating equation x = (d+r) / cos(alpha) is nice and simple, and I notice that your Siemens controller has a cosine function, which I'm sure it would love to use. Dividing a constant by a cosine shouldn't put much strain on the CPU, especially since it only has to be done once for each spindle angle.
I would find it fascinating to see a machine produce a flat surface from circular movements. It's one of those "impossible" things, like the drill that makes square holes.