It's not a good or bad idea...ideas aren't really ever good or bad. You have pros and cons:
Hills:
Pros:
1) Not overly obsessed with exact pace
2) Improves/corrects running form/posture
3) Ability to reach a higher heart rate and thus a higher Vo2 due to increase in muscle mass used compared to flat running
Cons:
1) Not specific to most race demands
2) Inability to accurately measure fitness compared to reps on a measured loop or track
3) Increased eccentric muscle damage and thus recovery from the workout takes longer.
You can minimize some of the cons by combining both in one workout, but you'll also minimize some of the pros.
Everything depends on what purpose you have. I'd say start with all hill repeats, then over the course of a "season" you'd move from a combined approach to an all track rep approach. So similar to this:
wk1: 10 x 2:00 hill
wk2: 10 x 2:00 hill
wk3: 10 x 2:00 hill
wk4: 2 x 800m, 6 x 2:00 hill, 2 x 800m
wk5: 2 x 800m, 6 x 2:00 hill, 2 x 800m
wk6: 2 x 800m, 6 x 2:00 hill, 2 x 800m
wk7: 10 x 800
wk8: 10 x 800
wk9: 10 x 800
Alan