Whitehat Point of View:
CSS image text replacement is fine as long as the text on the image is exactly the same as the hidden text.
Blackhat Point of View:
The is no other valuable thing a blackhat can do but add in more text that is not appearing on the image itself. This cannot be detected right away by the bots. Usually it is someone that reports it on Google's Spam Report and needs some manual inspection by someone from Google. If none of your competitors see it and no one submits a spam report, then you are not yet in doom. But eventually you might be in the future.
My personal point of view:
If you are doing SEO for your clients and want to keep your clients for life, or at least as long as possible, then stick with the whitehat way since it goes a long way.
Going back to your question on CSS image-text replacement. Yes you can do that.
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