No it's actually a useless way of doing it, as the ADC noise floor modulation is much bigger than my DACs. The only way of overcoming the ADC issue is to use a notch filter, and feed the ADC with just the residual noise, so the ADC just measures the distortion and noise, not the actual signal. The APx555 has a great way of doing this - one ADC covers the fundamental sine wave signal, another looks at the notched signal (it's notched via a low distortion analogue notch filter). Then the APx555 stitches the two results together in the digital domain. If the analogue notch filter is perfect, then ADC noise floor modulation is eliminated.
The downside to this is that only a single notch is employed, so you can only use a single tone sine wave input.