It a bad option for a few reasons. First it keeps the knee wall attic space outside of the "building envelope" which means that the knee wall and the floor/ceiling below are exterior surfaces, from an insulation standpoint. Now, you have rafters without insulation, what is the chance that the ceiling below is properly air sealed and insulated to high standards? About none, eh? In a typical older home you may be able to effectively insulate an existing rafter with r-21 to r-30 batts, but there is a 99% chance that that knee wall is framed with 2x4s for a max of r-15. Next you have to place a finished panel over the back of the knee wall, and if it's a code inspected situation, this covering has to be fire rated. The reason is that batt insulation is not effective if it can be exposed to "air washing" of the exterior surface. IOW, without sheathing on a wall, the performance of the insulation is greatly compromised. Next the access doors to the knee space are now technically exterior doors, since they lead to the exterior. Are your doors insulated, weatherstripped and ready to perform as outside doors? No? Probably not, and if they typical hollow core doors they can actually sweat and frost on the interior surface if it gets cold enough.
As for asbestos exposure in sheetrock mud, I would really do a bit more research before I got too freaked by the potential hazards present. First, unless we are talking about popcorn or other heavy textured surfaces, it is entirely possible to drill strategic holes in your ceiling and never get near the joints, or compound. Second a LOT of the information online is garbage, since it is "sponsored" by law firms, and others, who are seeking litigants for mesothelioma cases. When it comes to US government info. on the hazards, they would literally be the last source I would trust, having studied all the bullshit they pulled to create and support a billion dollar a year Radon removal scam. Just my opinion, but when it comes to old, smooth finish, painted sheetrock, I'll stick with the Canadian Government standard of basic dust control protocol, with dust masks, vacuuming, etc.