That's probably good enough for almost everyone who uses hostnames to represent physical machines or services. But it's totally unusable if you want to create certificates on the fly in response to user signups.
I've been calling this "the tumblr scenario", but people seem to think there's a way around it without just using another CA.
I don't understand why Let's Encrypt can't consider validation of the root domain good enough to produce a wildcard. Email at the root domain is what most providers use, not exactly much worse.
EDIT: It's now 20 per domain per week, better but still not viable for even a mid scale operation. A single wildcard is a much nicer and easier to maintain solution in any case.