Intonation is to homogenize the pitch variance from open to fretted notes. The fact that we generally choose the 12th is just a happy medium. There is reasonable debate that, if you are not one to play above the 12th fret, then it makes more sense to intonate at the 9th fret.

Question: How can you say it is half the length of the string if it is not intonated? Until the string is intonated, your 12th fret harmonic isn't half, it's something else. I suppose you'd get there, but using a moving or changing control note would make it tougher.

Once it's intonated, open and 12th fret are the same (because it's half!) so why not use the open string in the first place? :)

I didn't come up with this all by myself, I confess. Most tutorials I've seen do not suggest using harmonics. The only place I ever see that is on Forums. ...You know, those places where the sources are dubious and everyone is an expert? ;)

Here is a good one
http://www.projectguitar.com/tut/intonate.htm