I do it to students. It gives them tremendous confidence in themselves to know they can fly a nice pattern using outside visual reference alone
Sounds like good fun except how do you know what your altitude is if all the instruments are covered up. While you are having fun with your instructor in the circuit, don't you think it may be bit hazardous to other aircraft that are using their altimeter on the circuit. Best leave the fun with no instruments for the training area, then stick to standard procedures in the circuit.