I've been considering stopping to use the menu system all together, in favor of taxonomy terms, or other entities. Entities are superior to regular menu-entries in many ways because they integrate well with most other Core systems as well as contrib.
Since vocabularies already have the ability to create a hierachical structure, taxonomy terms seems to be the ideal candidate here.
The question is, how have you attempted to implement this, and how did it work out? Are there any pitfalls that one should be aware of before trying this, or any limitations that limit the usability of this approach?