It looks very appropriate for fantasy, and kids aren't the only ones playing fantasy-inspired miniature games or RPGs.
You can buy bags of "matchsticks" that don't have the match heads on them.
I tend to use a combination of balsa and basswood strips and medium or heavy cardstock to scratchbuild miniature buildings, saving foam for actual terrain pieces, or occasionally stonework. But that video of what looks like a gnome/elf house built out of matchsticks was certainly entertaining, and serves to show that scratchbuilding isn't really "difficult" as such.
It's more like taking a leap into the unknown, and dealing with design and engineering issues as you go along.