Yes, this is possible and, assuming all other rules are followed, legal. If you look at the SmartDashboard project on FIRST Forge (
http://firstforge.wpi.edu/sf/projects/smartdashboard), you will see that there is the ability to customize the SmartDashboard to perform image processing. The full documentation is still in process, but you should be able to skim through the code and see how it is working.