Why not?
And compared to what?
There is a learning curve especially if you're new to the Silverlight/WPF/XAML world, but once you get a hang of it and especially of the MVVM pattern, it's much easier to create such applications, and that is even without having to resort to further RAD tools like the WCF RIA Services or LightSwitch.
It's a big advantage to be able to re-use domain logic/validating code without having to replicate it in JavaScript and keeping it in sync.
It's also much easier to create self-adjusting layouts for example and to apply one of those available, (halfway) decent themes, without having to struggle with HTML, CSS, JavaScript and Image Sprites.
Of course browsers become more and more powerful with the advent of HTML5 and SVG, making plugins more and more obsolete. But I have faith that when the time comes, Microsoft (or someone else) will make that development model compile and render to HTML5/SVG/JS then, because it's just too good. XAML is an Application Mark-Up Language after all and thus can serve very well as a GUI abstraction layer.