First up, you've gotta decide on the proper room for this project. Kitchens and bathrooms? Hell no — in fact, consider all wet spaces totally off limits. Guest rooms, offices or reading nooks? Yes, please. For my own little typographyfest, I chose a bachelor's attic which is used for quiet escapes. I'll tell you what would have made it even quieter: Having a handyman come fix the extremely loud squeaks from the old floor boards.
...however I disagree that this wouldn't be appropriate for a bathroom if the wall is properly sealed after installation with something like Mod Podge or a clear glaze.
As long as you're not ripping up a Gutenberg Bible or a Shakespeare First Folio, I think this is an excellent use for books that would otherwise be recycled or trashed. And that's just what I plan to do.
And here's the stats on publication:
http://en.wikipedia.org/wiki/Books_published_per_country_per_year