Yes, using upholstery vinyl for bookbinding is certainly a possibility. I got a large reem of it from my grandfathers and was curious if it would work.
I found my result to be satisfactory (see pictures below). The part that concerned me was the stiffness difference between my leather books and my new upholstered book. It still opens and closes fine but it does not sit open on a flat surface well (This book in question was bound several years ago so this could be an age thing). So, if this option is available, ensure you get a thinner fabric.
Pictures of my upholstered book
This book has been sitting around for a while so you will see some dust in the pictures.
Still holding itself well.
While the picture might make it appear like it, the book does not have any issues closing and opening.
Normally with leather I can wrap the fabric around the corners just right so that the mill board is no longer visible. I found this very difficult with the upholstery.
I am just looking for a more accessible alternative since finding and buying reasonably priced leather is a bit hard for me.
Just in case this has not occurred to you, I wanted to mentioned my preferred method of acquiring leather for my binding and miscellaneous crafts. I get near all my leather from second hand stores. More specifically from women's skirts. Once deconstructed they will have large enough pieces that I can bind at least 2 books made of 8 1/2 x 11in. paper. I found this to be very wallet friendly.