<p>Is hot glue suitable for FDM printing, or some process similar to it?</p>

<p>I think it has all of the required properties, and could produce a flexible transluscent print.  It's cheap, hotends are cheap, and the technology has been around for a while.</p>

<p>I couldn't find any examples or anyone talking about such a material for use, on here or the general Internet.  I wonder if there are tradeoffs or challenges that make it not worth pursuing.</p>

You could mount a hot glue gun to a 3D positioning frame, but you would immediately notice the following:
Hot glue sticks are fat, so you lose a lot of precision for each feed/retract increment. I.e., it's a lot harder to get precise feeds with a fat stick because the stick size is so much larger than the nozzle.
Hot glue sticks are short, so you would to create a filament to spool the stuff or come up with a glue stick feeder.
Hot glue melts at 120 °C and common plastics such as nylon melt at much higher temperatures. So hot glue would make an AWFUL structural part like a stepper mount. Even PLA barely deals with stepper temperatures. Note that temperature tolerance is irrelevant for costume parts.
Hot glue is soft, which makes it a great glue, but not very stiff for, say, making parts for a 3D printer. However, the parts might be fine for  use only in costumes, etc.
But, if you then used your 3D glue printer to dispense glue for gluing stuff together, well...that might be valuable. :D