I see no particular issue, although I wonder if you want to keep the game pure Ascii only (output to console?), Ascii drawn on sketch area, or replacing Ascii by some tiles.
The first option isn't well suited to Processing which is mainly targeted toward graphics (it has println but it is used mostly for crude debugging).

Processing is Java. There's no difference in power. Just a difference in application.

Working in Processing would speed up your development time, which is the most important hurdle. It takes me a month to write a game in actionscript with another artist producing all the art and animation as well as designing levels. On my own I imagine that development time would expand to 2 months if I was working full time. If I was working in processing I would add another month because the design environment of Flash lets  me cut out days of doing layout and positioning in code. In my spare time there's no telling how long it could take, especially if I got bored of it.