I suppose so, yes. It's been possible to do a "reasonable" flame effect since the nvidia 5900 at least [0], and there's been a lot of work on fluid dynamics (including fire [1]) since then.
Oh yeah, I actually wondered about that after I posted :) I was on the fence about this, but all the examples I can find use CUDA, so I guess CUDA is the way to go: http://www.google.com/search?q=flame+fractal+on+GPU That makes sense, because it's more about huge matrices (flames are just big histograms) and less about textures on polygons.
Yes, there are CUDA implementations such as flam4, but I'm always interested in new possible approaches to the problem, since I'm writing a flame editor and CUDA doesn't play all that nicely with it.
[0] http://http.developer.nvidia.com/GPUGems/gpugems_ch06.html
[1] http://www.youtube.com/watch?v=ZgoDypGMV50