The only scenario it would not make sense for a company to hire that way would be for very standard, repeatable tasks, where the performance has very limited impact to company's results. In any other case, I'd make sure people have skin in the game, even if the overall cost at the end will be higher to me, because those incentives will result in higher commitment and potentially lead to new / better / more efficient ways to execute.
Whether or not you should accept that in the form of equity, that depends... How long is that engagement supposed to be, how is the vesting period, etc...