Dear dmolson: Actually, the idea of "Subjective Camera," as it was once called, goes back to the beginning of Movies. In the 1890's, the Lumiere Brothers sent audiences fleeing from a Paris theater by adopting the viewers' point of view as a train roared into the Gard du Nord.
An extended use of Subjective Camera may be found in the beginning of F.W. Murnau's THE LAST LAUGH (1924), where the camera becomes the old hero/victim, a doorman (played by Emil Jannings), as he moves through a the lobby of an expensive Berlin Hotel to carry out his duties, loading and unloading suitcases from taxis.
The latter film was shot by the superb cinematographer, Karl Freund, who later came to Hollywood, to direct for Goldwyn. A young photographer named Greg Toland worked with him on a film called MAD LOVE (1935), in which Pauline Kael, in Raising Kane, found a number of similarities to CITIZEN KANE.
Toland probably provided the link to Welles in his notion of making an entire film in Subjective Camera.
Coincidentally, as has often been pointed out, Karl Freud finished out his career as Director of Photography for the I Love Lucy Show (where he set up the economical three camera technique still used in TV today).
Some will remember that Orson Welles was an early champion and employer of RKO minor contract player, Lucille Ball.