You see it in the store on certain products all the time, so why not books? New covers, titles, content. As long as the author adds a note saying that it's a previously published work I don't see anything wrong with that. Sometimes all it takes to generate new interest in an older book is change the cover. Authors get new readers all the time and they don't always check out your back list. I know because I'm guilty of it unless I absolutely love the author and then I want to read everything that she/he has out there.
You can expect a few re-releases from me this year, as well as the new series I'm working on. The first book that received a face lift if you will, is The Alpha Wolf's Mate. New cover, title, I updated it and added hot new content that includes an epilogue. Plus, I added a disclaimer so that anyone who's already read the book and doesn't care about the updated version won't purchase it.
If you didn't read the older version I hope you'll be interested enough in picking up the updated version. It's my one and only paranormal romance.