In my world, downstrokes and upstrokes are both fine, and allow you much more speed and fluidity than just using downstrokes. Same goes for hammer-ons and pull-offs. Your approach should really be dictated by the line you're trying to play, how fluid it needs to be, etc. My advice is to use all the tools you've got, but listen closely to what sort of attack works best at any point in what you're playing, and be willing to adjust as you ear guides you.

If 6you get a chance to watch any of the recognized "greats" of bluegrass flatpicking -- Doc Watson, Tony Rice, Bryan Sutton, etc. -- you'll see a variety of approaches, but they generally use whatever tools they need to get the job done, including alternating picking and hammer-ons, pull-offs, etc.