Such an arrangement can work, but the applications are very limited.
Take for instance a call center. You could have 24 people sitting in cubicles. Each person has a single line telephone (Say an AT&T 925) connected to some sort of channelbank (Newbridge 3624 for example).
If those people are only responsible for calling out to potential customers, but not taking incoming calls, then the loopstart/T1 arrangement would be fine.
I know this scenario is a bit of a stretch, but it would work.
Broadcast faxing might be another application.
