Isolation of the transformerless power supply
First, you should have a capacitor for both line and neutral. Otherwise, depending on the installation/country/plug orientation/..., you'll end up with a non-isolated circuit.

Then, you should use X or Y rated capacitors for this application, to ensure safe failure mode (if it fails short, you end up with a non-isolated circuit). And I think 250V is not enough. A few thousand volts would seem better to me.

Now, honestly, even with those two requirements fulfilled, I wouldn't do that for an AC supply.

However, it can be interesting when you want to isolate two low-voltage supplies: there is even an app note from maxim.