Is it a good idea to have an SCCM distribution point serve as a DHCP server as well? Why or why not?

Personally I don't see any issue here. The server is designed to run multiple services.

However, if you want to use WDS there might be a conflict because WDS and DHCP use the same port UDP67. So you need to take an additional action to get it working.

1. You need to force the WDS service not to use the DHCP ports:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\WDSServer\Providers\WDSPXE -> UseDhcpPorts -> change it to 0
2. For the new configuration to take effect run the following command on the co-located DHCP and WDS server:
WDSUTIL /Set-Server /UseDHCPPorts:No /DHCPOption60:Yes
3. Go to WDS properties -> DHCP tab -> check if the "Do not listen on port 67" and “Configure DHCP option 60 to PXEClient” options are ticked


If you want more information, please refer to this MS article:
https://docs.microsoft.com/en-us/previous-versions/system-center/configuration-manager-2007/bb680753(v=technet.10)?redirectedfrom=MSDN

Also, check out this discussion:
https://social.technet.microsoft.com/Forums/systemcenter/en-US/30b6286b-2db7-4dd1-b17a-47663662787f/wds-and-dhcp-on-the-same-sccm-site-server?forum=configmgrgeneral

In my opinion, Its not a good idea unless you have a real challenge to place one more server.

Challenges

Unwanted Dependency - Currently, it may work but we dont know if an upcoming update for one product may cause any issues for the other product. Typically, Microsoft dont test such scenarios.

Flexibility - We loose flexibility on OS upgrades. Sometime, one component will support an inplace upgrade and the other will not support. 

Cheers !