One very cheap and similar technology that already exists is papier-mâché. It uses just water, newspaper (recycled) and flour - all very cheap components. Could a 3D printer be designed to print an equivalent to papier-mâché with tiny pieces (pulp) of paper rather than strips?
I've done some searching, but all I can seem to find is Mcor, who's technology relies on office paper (not recycled, not so cheap), glue (probably more expensive than flour) and cutting away the excess paper rather than printing paper pulp. Not that's Mcor's technology doesn't look amazing.