Can the Arduino Uno become an AVR programmer and use the ICSP header to program the target board
First of all, as configured, the RESET pin can not be used as an output pin. In order to use it as an I/O pin, you would have to program the RSTDISBL fuse. But once you do that, as jippie said, it becomes near-impossible to reprogram your Arduino (if you have the socketed through hole variety of the MCU, you could pull it out and put it into a high voltage programmer; in all other cases, it's effectively impossible).

So in theory, you can use the ICSP header the way you suggest. In practice, it's under almost any conceivable circumstance a terrible idea.