I've never seen this done with thru streets, let alone in a grid pattern. It would work just as well with cul de sacs, and then you aren't restricted to such a geometric layout and trying to fit a playing corridor into a standard block width. If you have 14 blocks in a mile that's about 125 yards wide including the width of the street plus both lots on either side! Bet those houses get hit a lot, and I have zero sympathy for the idiots dumb enough to live in them.
Not saying that doing a similar design with cul de sacs is a great idea, but at least you can set the houses back an arbitrary amount to where they aren't in play. You have fewer lots but they'd be bigger and you could actually sit on your back deck or have a pool without having to wear a hard hat so they'd probably make up the difference.
I have to wonder if the streets were pre-existing and they just built a course to fit, or at least they were platted and there wasn't any way for the developer to change the plans and do them differently.
I've seen courses like Bill describes in Phoenix in California too. You take some hilly land and have the houses overlook the course. At least the houses are out of play but the golf is going to be much less interesting since your routing is pretty much dictated by where the valleys take you and you don't get the big elevation changes that would otherwise be possible. But in areas where you can sell those lots for a half million its hard to argue with the financials. A golf course using the ideal routing and taking advantage of all the land certainly wouldn't have nearly the return.
Not every course has to have architectural merit, some are just places for people to knock a ball around. Its like the difference between playing baseball in Wrigley Park or Fenway versus a dome.