This method of shadow volume is limited in a number of ways. First, it is very difficult to use to shadow onto anything other than flat surfaces. Although you could project onto a polygonal surface, by carefully casting the shadow onto the plane of each polygon face, you would then have to clip the result to the polygon's boundaries. Sometimes depth buffering can do the clipping for you; casting a shadow to the corner of a room composed of just a few perpendicular polygons is feasible with this method.
The other problem with projection shadows is controlling the shadow's color. Since the shadow is a squashed version of the shadowing object, not the polygon being shadowed, there are limits to how well you can control the shadow's color. Since the normals have been squashed by the projection operation, trying to properly light the shadow is impossible. A shadowed polygon with an interpolated color won't shadow correctly either, since the shadow is a copy of the shadowing object.