I think about this every time I have to press my brake pedal.
The challenge would be sizing the system electrically (and mechanically, as you point out with the belt concern) to be able to offer any meaningful braking resistance. I recently drove krousdb's Prius, and if I'm not mistaken, I was seeing 50-60 amps (@ 270+ volts) when using regen to its full extent. And that offered only "mild" deceleration.
I think the answer (to enable engine-off operation) might lie in tapping into the transaxle, perhaps via the 5th gear, as axmonster was considering using for EV assist:
http://ecomodder.com/forum/showthrea...-fwd-1605.html