Potentially very dangerous, because you can get a number again that is already in use.
What you propose is resetting the sequence to 1 again. It will just produce 1,2,3,4,5,6,7,.. and so on, regardless of these numbers being in a gap or not.
Update: According to Martin's answer, because of the dangers involved, MySQL will not even let you do that. It will reset the counter to at least the current value + 1.
Think again what real problem the existence of gaps causes. Usually it is only an aesthetic issue.
If the number gets too big, switch to a larger data type (bigint should be plenty).