It's been done before with decent results. Fraggle Rock is an example of a release that was upconverted sd to hd and with lossless audio. Not sure if there would be any major advantage to the pq other than a much higher bitrate. But lossless audio can be a nice bonus, assuming it is also not just an upconvert. For things like tv shows not shot on film, it could be worthwhile for space savings alone if price is good. People on the forums tend to bash dvd, but it can still look and sound reasonably close to blu if using the same source. It's just a shame dvd authoring didn't adapt to more modern codecs like MPEG-4 or something similar to FLAC for the audio.
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