It's one of the possible solutions.
I've also seen a similar approach used for PC, although there it was used to get the water to work with deferred shading. It included rendering depth info at a lower scale, using deferred shading and then mixing the results.
In the end, I decided to use dithering for PC too but mixed with alpha as it adds fuzziness to the smoke.
Also, in some cases, I decided not to use it at all. Muzzle flashes, some explosions and particles. They looked better with either scaling down or being cut sharp and clean.