The biggest issue I can see against it, is the way the game uses losses. If it's an OC, that has the potential for abuse, because someone can say 'oh, well, they had this thing that was important, I'll give that up' when it didn't really previously factor into the character's background anyway. (This is more for secondary losses/changing losses, since I would assume the original app would have to give good reason for an initial loss to even be accepted).

If some way can be found to make sure the 'I make my own canon' factor can't be abused, I see no huge reason to reject the idea, though I'm not that big on OCs, personally.