Tapping can be done on acoustic but it generally sounds crap. The sound of the strings between the headstock and the fretted finger makes a dischord with the section of string you want to hear. You're best tapping on the wound strings of an acoustic because the thin strings are too quiet. If you amplify an acoustic tapping can sound OK if you're very good at it. Check out Van Halen's Spanish Fly, I think that was on a straight acoustic and it's awesome.

On electric it's very easy to play phenomenally fast with tapping but very few people use the technique as anything more than a way of showing off and play genuinely musically demanding and interesting things with it.