[curtis73]

I think the keys here are heat and articulation. It would be very difficult to isolate heat. As it is, your wheels take a lot of heat from the rotors since they're bolted to them. If you use the actual wheel surface as a brake friction surface, not only would it require the use of an unsuitable material for the wheels, but the wheels will get screaming hot; probably hot enough to melt the bead of the tires.

You would have to build the wheels out of cast iron or forged steel which is not only a very unsuitable material for wheels, but its insanely heavy. You would (as someone pointed out) be forced to change wheels when the rotors wore out.

Basically, the setup that is in existence right now does what you're talking about. The rotor is basically part of the wheel since its bolted to it. Simply moving the rotor to the wheel itself wont save you any weight, and it will move the weight you have outward on the radius making polar moment of inertia worse.