Spray Foam

I am looking at an old house and the clients are interested in removing all of the plaster on the interior and spraying closed cell foam.  I am all for the energy upgrade, but my concern lies in the fact that the envelope is not water tight and any insulation we put in there will accelerate the water damage.  I feel like the best thing we can do, although not as cost effective, is to remove all of the siding, spray from the outside then put high R over that.  That would give them closer to R-19 walls with no thermal break.  I guess my question is, I know that the best was is outside in, but are they doing damage by spraying inside out.

Evan