Can a loose leaf tea basket be used for steeping/brewing coffee?
I have brewed coffee with my tea steeper in a pinch.  If you are not grinding your coffee you should either buy a percolator grind, or if using a drip grind, you will want to use a filter.  I have a used a melitta #2 coffee filters in my steeper.  They require a little finagling, but I can get it in there.

A side note, after doing this you either need to treat the steeper with vinegar (or other acid) or wash it really well.  Otherwise all of your delicious (and expensive) loose tea will be tainted with coffee flavor.