Hallo Abhishek,

in earlier days, when high resolution and fast ADCs were very expensive, such succesive approximation was actualy done. But today there's such an enormous amount of good and cheap ADCs arround, that 'building' an ADC like we just discuss might be a little bit too complicated. Think about the modern, very nice devices with several inputs and serial data transmission to microcontroller, offering almost every precision, you need.

Unfortunately, only converting signal is not enough. It's essential for high accuracy to have also a high precission sample/hold circuitry. And this to implement with your methode seems to become rather expensive...
Ok, it strongly depends of signal frequency range, of course. When you only want to convert quasi DC signals a big capacitor might be sufficient. But when signal has some bandwidth a really good sample/hold is essential.

Big advantage of today integrated ADCs is, that they already consist of a sample /hold, correctly spoken track/hold. This is implemented by very carefully designed switched-capacity circuitry. It would be very difficult to build such a track/hold circuit by discretes, because stray capacitance would make trouble. With integrated ADCs this is no problem, because this stray capacitance is well matched and compensates.

When designing an ADC, sample/hold circuitry makes the more trouble the slowier converting stage is. And so, to have a fast converting stage helps to ease sample/hold circuitry. In this point modern ADC with built-in track/hold are also superior, because track/hold circuitry is exactly matched to converting stage. These very small, very nice ADCs with built-in track/hold stage are offering a phantasic performance. It would need a big amount of expensive discretes to achieve similar precicion. (Have a look at price of high precision sample/hold chips from BurrBrown...)

Finally, there is one additional point which has to be kept in mind: Ground routing.
By analog-to-digital converting you always have problems with ground routing. Analog and digital ground have to be well separated, but connected at one point.
With today ADCs, consisting of track/hold, converting stage and interface in one housing this ground routing problem is also optimized, because pin configuration is just supporting this task.
Ground routing problem can also solved, when using discretes, of course, but it's much more difficult. Some skill and testing is needed.

Bye,
Kai