i think that's the way Byron Burch has it in his book "Brewing Quality Beers". you can buy a plastic valve for $2-3 bucks at a HBS to replace the cooler spigot. your efficiency might be a little lower, but very doable.
i think once you do it, you'll want to make more conversions to the system. i did the same thing. i have the cooler mash/lauter tun, and used a ladle to transfer sparge/mash water. primitive, makes great beer, but a right pain in the arse! i'm having a three tier keg kettle system built this week, and OH I Can'T WAIT TO RUN THAT BABY!!!!
there's nothing wrong with starting small, and adding on. it's the way i do just about everything. it may cost more in the long run, but i feel like i learn more and can appreciate things more that way. just my $0.02.