There's nothing 'wrong' with it. On the contrary, for recording, most people will prefer micing the amp instead of taking the line output.
Taking the line output is the quick and easy way. If you have no line out of the amp, you can use a DI in between the bass and the amp, feeding the signal from the bass directly into the board, without having it going thru the amp first. Or you can put some DI's in between the amp and the cabinet. (Not all DI's allow this!)
What you have to take in account when using DI's and direct outs:
When using a DI, or direct out, you are taking the signal somewhere along it's signal chain. This means, you don't get the sound the way the bassplayer wants it to sound. Most experienced bassplayers will have a certain guitar-amp setup of which they like the sound, setup for their sound. If you use the DI in between the guitar and amp, you'll get the sound of the guitar, you don't take the amps sound. If he's overdriving the amp, you'll loose alot of his sound...
When you take a direct out of the amp, or DI in between amp and speaker, you take it right in the middle of the chain. The amp is setup to have it sound thru the speaker, so the EQ will NOT be set in an appropriate way when you take it from there and use it with another amp/other speakers...
That's why alot of amps have a switch next to their line out to choose between the signal before the preamp or after.
I take both signals whenever I have the chance... Combination of both, DI for highs, mic for lows is a common thing to do...
The SM57 is not a mic of choice for bass, it's not designed for the freq-range of a bass amp. But in budget setups, it's used quite often that way...