I think it depends on the situation and the age and maturity of the people involved. If both parties are aware of the expectations, are of legal age, and are both consenting and respectful of each other's boundaries, then it can be a mutually beneficial arrangement. However, if one of the parties is being taken advantage of, then it is not a healthy or appropriate relationship.
I've never been in such situation, but as young as I am, I could say that it depends on how sincere you are with your relationship. For me, "sugar baby" is basically just a calling, wherein people tends to go stereotyping. However, if we scratch that out and be sensitive with our surrounding, then I guess it isn't bad at all if both of you really feels committed with each other.