This is something that can be done by both nail and flesh players, though I think it can be especially advantageous for flesh players. Please watch this video for more information about the history and technique:
Sources:
Aguado, Dionisio. Escuela de guitarra (Fuentenebro, 1825), p. 83 [Arpeggio study that implies use of little finger.]
Aguado, Dionisio. New Guitar Method, ed. Brian Jeffery, trans. Louise Bigwood (Tecla Editions, 2004), p. 170
Bathioli, Franz. Gemeinnützige Guitareschule (A. Diabelli und Comp, 1827), p. 37
Cottin, Alfred. Méthode complète de guitare (Paris: Alphonse Leduc, 1894), p. 3
E., J. M. G. Rudminetos para tocar la guitarra por música Música notada (Imprenta de Álvarez, 1819), p. 20
Ferguson, Robert, ‘Henry Worrall (1825-1902): Anglo American Guitarist’, Soundboard Scholar, 2 (2016), p. 10 [For references to the use of the little finger by Worrall, N.P.B. Curtiss, William Foden, and William O. Bateman.]
Gräffer, Anton. Guitarre Schule (Anton Strauß, n.d. [1811]), p. 9
Guthmann, Friedrich. Anweilung die Guitarre (C. F. Peters, n.d.), p. 6
Hackl, Stefan, ‘A Survey of Nineteenth Century Viennese Guitar Methods’, Soundboard, 35.3 (2009), p. 18 [Reference to Matiegka using the little finger.]
Ledhuy, Adolphe. Méthode de guitare (the author, n.d. [1834]), p. 7
Makarov, Nicolai. Some Rules for Superior Guitar Playing (A. M. Kotomin, 1874), p. 11
Molitor, Simon. Grosse Sonate fur die Guitare (Artaria, n.d. [c. 1806]), p. 6
Prat, Domingo. La Nueva Técnica de la Guitarra (Romero y Fernandez, 1929)
Rusanov, Valerian. School for Seven-String Guitar (Tyumen: A. M. Afromtsev, 1913) p. 27 [Also mentions that Makarov and Vetrov used the little finger.]
Sarrablo, Manuel. Método Racional (Zaragoza, 1890), p. 7
Staehlin, Johann Jakob. Anleitung zum Guitarrespiel (Johann Andre, 1811), p. 4
Swoboda, August. Guitarre Schule (Wien, n.d.), p. 5
Weiland, Francis. Instructions for the Spanish Guitar, Philadelphia: G. André & Co., n.d.], p. 10
No-Nail Guitar 
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