But I can't help feeling that generating normal maps from full 3D models would be more robust overall.
For instance you could easily make things like a walking animation or calculate ambient occlusion (pretty standard 3ds max work.) Render it into a sprite sheet and you have the pipeline to dramatically reduce the amount of work artists would have to do.
I guess Sprite Lamp would be best geared toward indies/studios without 3D modelers and can't invest in the aforementioned tech.
This is cool nonetheless.
Personally, I would never try to do this kind of work by hand in 2D (not a talented-enough draftsman). But the grandparent is right...even in my clumsy hands, I can do a decent job working in 3D. It's just an easier workflow.
Now, style-wise, nice hand-drawn 2D animation is in a class of its own. If indie studios are sticking with 2D, I'd suggest it's frequently more a matter of style than price.
To create a rich 2D world, you probably can get by with one or two talented artist/animators. Yes, they may be in a class of their own, but you don't need nearly so many. Paying them does not need a big budget.
You might even say it could be a game changer.