It is! While I can't find any examples at the moment available to play in the Scirra Arcade, there are certainly games out there that employ a more isometric approach to 2D camera placement.
You mention that there are a lot of top down games (like Ghost Shooter) and platformers. The reason why, simply put, is because it's easier! With games like Double Dragon and The Legend of Zelda, you have to treat z-indexing with greater care and attention. For example, if Link is above a crop of berry-bushes on the screen, his z-index needs to be lower than the bushes' so as to appear behind it. If he's lower than the bushes, his z-index needs to be higher.
With "flatter" games, you often don't need to deal with changing values of z-indexing as often. Sure, there are exceptions, but generally speaking, isometric games offer more challenges when it comes layering.
I'm speaking from personal experience, of course, and I am no master by any means.
The Bespectacled One2011-11-29 01:05:57