I agree that it would be bad for the coop floor, and that it would need to be deep enough.
As far as giving off heat-- I agree that it will probably not give off enough heat to matter much, in most situations.
Why wouldn't it compost in a raised coop, assuming the moisture and temperature levels are right?
Being on the ground would give a boost in the organisms that cause composting, but I can't see any way to have a chicken coop that is so free of bacteria that composting will never happen. There...
The difficult thing is that they still need plenty of ventilation, it just needs to be in places that do not blow on them while they are trying to sleep.
So you want it nice and tight in some places, but with openings placed where they will provide ventilation that doesn't blow on roosting...
I always get confused about whether "deep litter" is the one that is moist and actively composting, or whether it is the one that stays dry and does not compost in place.
The moist/composting one would add some warmth. When it freezes, it probably quits producing heat.
The dry one is not going...