That doesn't work for tiny creatures since they have no reach, don't threaten, and therefore can't flank. They also provoke an AoO when they move into their opponent's square (as they have to) in order to attack.
It would only become viable with Improved Invisibility or Blink but relying on those to be a viable character eliminatest the first six levels of gameplay (and makes things difficult for another two or three after that--an 8th level wizard doesn't have a ton of 4th level spells and probably doesn't want to use all of them to make the rogue playable). It would also make the character much more vulnerable to being shut down (Pit fiends, etc have True Seeing always active and then there's See Invisible, Invisibility Purge, Lanterns of Revealing, fortification armor, True Seeing spells, anti-magic fields, Blindfight, and Uncanny Dodge (I--II makes flanking worthless too) etc) all of which would make the character completely unable to perform his usual role while most of them only make the ordinary melee rogue go back to relying on flanking for sneak attacks.