Using transistors in with limited gate (or base) voltage will make them limit current, which will introduce a significant voltage drop across the transistor, causing it to dissipate energy. This is considered bad, wasting energy and shortening the life of the component. But if I keep the temperature low, either with a heat sink or by limiting the power, is it okay to use a MOSFET this way? Or is it fundamentally bad for the component to make it dissipate power?

I ask because I get excellent results by controlling a MOSFET with variable voltage to drive an LED strip. With 8-bit PWM, the LED jumps in brightness from zero to "reading a book" levels, while the voltage-driven mosfet allows very smooth turn on, despite also using 8-bits of voltage levels. Linear versus exponential power makes all the difference, and PWM is linear. Our eyes don't perceive light linearly. The voltage-controlled result is too good to not use.