The only issue you may run into when using step/direction on the servo drive, is that if you use a very high pulse rate from your motion controller, you may not be able to get the minimum required pulse width for the stepper drives, which is 2us for the Geckos.
But I would think that the electronic gearing would be fine.
I've never used a lathe, but from what I've read, I wouldn't use Mach3 for it.