I've seen it done a few times, but only a few times. Heck, I had a monster do it a few times to get to the party.
Although I'm more likely to play d20 Modern now than D&D (and am currently between campaigns, having just moved), I didn't have an enormous problem with the falling damage. If you're a CG bard hit by an axiomatic unholy greatsword, that's 6d6 damage right there -- but if you survive the hit and if the hit is just a tiny fraction of your hit points (ie, you're 15th level with a good Con), you say that you dodge back and it's just a very painful scratch, 4d6 of which feels eldritch and magical. You use flavor-text to have it make sense.
So in games, I do the same for falling damage. 100 foot fall and you walk away with 14 points of damage due to my horrific rolling? That was an awning. You fell into one of those overhanging awnings and collapsed it, and then you landed in a tomato cart, and then rolled out onto the ground. 100 foot fall with just 20 points of damage? You desperately grabbed at the rope for a convenient hanging flag, one of those flags that juts out of city walls at a forty-five degree angle, and you swung to the ground and then rolled as you hit the cobblestones, and yeah, it hurt, but you're okay. And so forth.
I do that in d20 Modern, too -- it's just that if you blow the save on the 20 damage, then when you swing to the ground, you land headfirst anyway and land in a limp, boneless heap.
It's all about the flavor text. Most of the hate for the concept of hit points comes from the failure to appreciate them as flavor text, and falling is one way that most DMs, who can conceptualize parries and dodges and tiny scrapes, don't think to translate the numbers into flavor that makes sense.