Question

I know it’s not a good idea, but I would like to double check that this won’t do something crazy like crash the server.

CREATE TABLE [dbo].[Items](
    [Id] [nvarchar](255) NOT NULL PRIMARY KEY,
    [Value] [nvarchar](max) NOT NULL,
)

It would be interesting to know details about how a key like this compares to an [int] key, but just confirmation that this will not hurt anything is sufficient.

Answer 1

Can you use VARCHAR(#) as a primary key?

Yes.
From the documentation, a VARCHAR(255) will take upwards of 257 (255+2) bytes (depends on the length of the actual data), for that column — per row.

It would be interesting to know details about how a key like this compares to an INT key

INT takes 4 bytes, according to documentation. Depending on your data, there are numeric data types that take less space:

• SMALLINT: 2 bytes
• TINYINT: 1 byte

The lower the number of bytes, the faster accessing data in the column will be. That includes JOINs. Additionally, the database (and backups) will be smaller.

I would greatly question the need for such a large VARCHAR as the primary key — GUIDs aren’t even that long.