This is a cheap and easy method of covering a wall in the bathroom but it is not perfect and has a few drawbacks - the main one being it is not totally waterproof so is not suitable for use in showers or over baths.
It can be used around other areas in the bathroom but it needs a perfectly smooth, flat surface or any undulations or regularities will show through the final finish, so a plastered wall is really the only suitable substrate. This is fine if that is what you already have but if you are starting from fresh then plastering a wall (and expensive pursuit) does not make economic sense, especially when there are alternatives that require little or no preparation.
For example, the following photographs show a bathroom that is due to be refurbished. You can see from the first image that the walls are not in the best of condition as they have recently had tiles removed from their surface. All of the adhesive and irregularities would need to removed either by sanding or chiselling and then the whole wall made smooth - usually there is no option other than to re-skim the wall with a fresh coat of plaster.
The second photo however shows the completed bathroom where the wall covering has gone up straight over the exciting wall (with all of its imperfections). The owner of this property looked for an alternative to wallpaper and instead opted for bathroom cladding. This is probably as easy to fit as wallpaper (if not easier) and flew up over the rough wall with no issues.