To me, it seems expensive for a power supply, but I usually snag my spare power supplies out of free computers listed on CL...
It's expensive because it's really tiny, passively cooled, and designed to work with low-to-moderately powered systems in very small cases.
I don't see any
immediate reason why you couldn't tap a picoPSU if you have a spare connector to draw your power from and you're able to provide the proper voltage to the monitor. The fact that others have done so with normal PSUs is proof of that, naturally.
The first question I have regards the power draw. How much does the LCD draw when powered on? (and at what voltage maybe? see below regarding "rails") How much does the mobo/cpu and whatever else is attached to it (HDD, ROM drives, whatever) draw
when at full load? If all of those numbers add up to less than 160w (I wouldn't push a picoPSU beyond it's rated use,) then yeah, maybe you're in business.
I'm not confident with the whole "rails" concept when it comes to PSU power distribution ("how much power is available on the 12v rail, how much on the 5v rail, etc.") so I can't speak to that. Maybe someone more familiar with the picoPSU can break that down and explain if that might be a factor in this case... ?
An interesting idea, nonetheless! I'm interested in seeing where this goes.
EDIT: I'm posting this without reading it fully, so it may or may not be interesting/useful: http://www.jonnyguru.com/modules.php?name=NDReviews&op=Story&reid=207