Itll work if you go for a couple of good size tecs, and no tecs inside the system, i.e. use the 'cooler' water to cool the wc loop, if you put tecs inside the wc loop it wont cope. Its an alright method to get round using a large/bulky rad, albeit at the price of a dedicated psu and some tecs, and a couple of quality heatsinks. Id recommend alpha8045's.
The other problem is condensation prevention and insulation if you go 'too' subambient and drop below the dew point. If you temperature control the water to always be 1degree above the dew point (temerature and humidity sensor needed) then all would be good
]JR[