I'm almost positive she's doing that wrong.

or maybe we were doing it wrong all the time, and this is the actual way to do it.

I wonder how that would sound.

Something like this:

http://www.youtube.com/watch?v=tfgHWtafAMc

Actually, probably more like this:

http://www.youtube.com/watch?v=KifrKu4mIgg

Surprisingly it actually doesn't sound terrible. I never realized it was done. I suppose if there is an electric cello and electric violin, why not.

Better:
http://www.youtube.com/watch?v=AIHabvURnpk

You could do it but it would not be wise to use standard tuning,

That must be really light guitar, considering she can hold it like a violin without any troubles.