I edit a markdown-based website for a living. I'd say that it works really well, but a proper text editor theme makes a big difference.

I tweaked my Markdown theme to make headings bolder, links linkier, and blocks blockier. Sublime also collapses link URLs.

This keeps the text very readable, while letting me edit text with powerful tools. There's a table of contents plugin, but Cmd + R is a much faster navigation tool.