Earlier quoted context omitted.
It's not the most common transliteration, but it's common enough; and even in Cyrillic, if you see "и" where "й" would normally be expected, you'd usually read it like the latter; e.g. "йод" is sometimes spelled "иод", but everybody will read it the same. Given that the written distinction between и/й dates back to Peter's civil script reform, and that it wasn't even considered a separate letter of the alphabet until…
Hm. I thought Й was being used in the old style (pre-1918) writing as well? At least this[1] translator keeps it in masculine adjectives. Though it doesn't keep the dots on a Ё. I've never seen И substituted for Й, but Ё -> Е is common, especially in names (for example some people write "Артем" but everyone still reads it as if there's a "ё"). [1] http://slavenica.com
This still shows up in some contexts - e.g. Й, like Ё, isn't used in bullet lists; try it in Word - it'll go from И straight to К.