It's not the most common transliteration, but it's common enough; and even in Cyrillic, if you see "и" where "й" would normally be expected, you'd usually read it like the latter; e.g. "йод" is sometimes spelled "иод", but everybody will read it the same. Given that the written distinction between и/й dates back to Peter's civil script reform, and that it wasn't even considered a separate letter of the alphabet until the 1918 spelling reform, it's not really surprising.

Hm. I thought Й was being used in the old style (pre-1918) writing as well? At least this[1] translator keeps it in masculine adjectives. Though it doesn't keep the dots on a Ё. I've never seen И substituted for Й, but Ё -> Е is common, especially in names (for example some people write "Артем" but everyone still reads it as if there's a "ё").

[1] http://slavenica.com

It was used before 1918 - it was first standardized in the Civil Script (1710). But it wasn't considered a separate letter until 1918 - so e.g. the standard alphabetic sorting ignored the distinction. For this reason, it wasn't always used consistently, although it was still much more consistent than Ё. And even today, "иод" is still considered valid spelling; indeed, it's the preferred one in scientific context.

This still shows up in some contexts - e.g. Й, like Ё, isn't used in bullet lists; try it in Word - it'll go from И straight to К.