Can yarn be considered a viable option as a replacement for bower and npm?

It depends on your exact use case, but... probably.

Currently, the major trend seems to be towards module bundlers such as Webpack and Browserify (and hence either npm or Yarn) and away from Bower. You can read an excellent overview of the situation at NPM vs. Bower vs. Browserify vs. Gulp vs. Grunt vs. Webpack, along with some reasons why you might want Webpack instead of Bower.

At the minute, you're probably using HTTP, where it works out faster to have one JavaScript bundle file rather than lots of source files (as would occur with Bower). That's why Webpack and Browserify are so popular (among other reasons) — they should increase performance and simplify development a lot.

Side note: HTTP/2 will diminish the value of module bundling, because multiple requests will become far less costly. See What is the value of using Webpack with HTTP/2 for a more detailed description of the issues involving HTTP/2.

If you use npm or Yarn, it shouldn't really matter if the dependencies are nested—your frontend dependencies will all be bundled anyway with Webpack/Browserify, so the main cost of using nested packages is that it takes up more space and more download time.

Since npm v3 and Yarn can do flat installs, there shouldn't be any issues with that anyway. In short: you probably can do it, and many other people are doing exactly that.

In recent days, there is an upward trend in the popularity of Yarn and its mainly due to couple of things different from npm.

One, it’s 100% deterministic i.e if you run yarn from any state, any time, 1000x times, it will still work the same way all the time. npm’s installs are nondeterministic. If you run it from various states, it will install different ways.

Yarn does some better caching too. In fact, it does it so well you’ll see a significant reduction in your install times. You can see 10x reduction in install times for big application.

Yarn also locks down your dependencies by default. It’s possible to do this with an npm shrinkwrap command but if you’ve ever had to maintain one of those, it can be messy.