Natalie Burke, a technical artist that once worked with Bungie on Destiny, gave a really good talk about this at GDC a few years ago. Unfortunately, the video of the talk is locked up in the GDC vault which you can only gain access to by purchasing a licence or a pass to the GDC conference. Here is a link to the PDF which is available in the vault for free: http://www.gdcvault.com/play/1022965/Animating-With
It essentially talks about how animating hair and cloth with vertex offsets is a really good idea from a technical standpoint as it removes the necessity for bones (joints) for many different hairstyles and various character accessories. She goes over how she used painting of vertex colors to store and control different aspects of the animations, such as drag, timing, and follow through. She goes over how they used a sin or cosine to oscillate the hair as the player moves and hooks up the intensity based on the velocity of the character. That’s about all I can remember, but maybe you can learn something else from the PDF.
So, in short, yes it is possible to simulate hair or cloth animation using the vertex shader and it is actually a good idea especially if you are going to have a lot of content that you don’t want to have to animate with bones.