This is not that popular in the PacNW but I hear of it gaining popularity in other places. I acutally just did some work on a building that used an encapsulated crawl space, with insulated stemwalls and no ventilation. Everything got moldy in there.

You may have a minor issue with an inspector, but what you are suggesting is allowed by the building code in one of two ways.

1) You need a Class I vapor retarder and your vent fan will need to be "continuously operated provided at 1 cfm for each 50 square feet of crawl space"

or

2) "ground surface is covered with a Class 1 vapor retarder, the perimeter (stem) walls are insulated and the space is is conditioned per the int'l Energy Conservation code.

Now in the case that I worked on recently, they used Option 2 and it did not work. We added some mechanical ventilation and will see how it fares. I have seen a lot of pro and con arguments for both.