I don't see why it couldn't be used as a gun, as long as the mame emulation of the game supports mouse input. Although aiming with a arcade gun was more of an artform than a science, I don't see how you would aim one of these without a visible cursor to track. I would think this would also be a bit slower than a lightgun, or even a regular mouse, though I don't know for sure.
Also, with a price of $79.95, I don't see why you would buy one of these over a actlabs lightgun.