Most certainly. Lime plaster is often essential for the plastering of earthen and straw buildings, as these buildings need to breath. Furthermore, lime plaster is renowned for its self-healing characteristics. When it becomes wet it expands and closes any fine cracks that may have developed. It also tends to get harder and harder with age. The best quality lime plasters are made from unslaked lime rather than the hydrated / builders lime which is what is more commonly available.

Also see: "With what can I plaster my walls?"