We're using this in production right now with greenlet. The way we're using it, it has less expressive power than an event-based approach, but a large majority of the code doesn't actually use the power that we lose by not using events. We can use events when we need events, and when we don't, we can write significantly shorter code that more closely resembles our intent.

I would guess that one large part of the reason that this is uncommon in production is that fresh CS graduates are not familiar with it. Another reason might be that you can't use this model at all on the client side for some popular clients (like web browsers).