Not really. It's a valid welding http://en.wikipedia.org/wiki/Orbital_welding), but I imagine it might be quite a task to scale it up to pipes as large as would be needed for this project.
For some reason Elon Musk is extremely enamored of welding technology. I remember seeing a page on an old version of the SpaceX site containing a high-level overview of the Falcon 9, where they went out of the way to mention how great circumferential friction stir welding is compared to whatever NASA used to do. And here he is bragging about it being the large stir welded thing ever created: http://www.nasaspaceflight.com/2009/01/musk-ambition-spacex-.... It's a revolutionary vehicle in many regards, but Elon seems to have a particular soft spot for welds.
Makes sense, most of the volume in a rocket is a tube structure. I imagine that SpaceX has spent a lot of time evaluating ways to precisely and cost-effectively build tubes...
Orbital welders can be used in pipes on any size (smaller sizes often need special welders). Not sure what the record is but they are commonly used on water pipes that are several meters in diameter. Should work fine for the Hyperloop tube. Seems like all the required technology is proven but I'm sure we will hear more from all the experts in the various fields.
