The top part of the shower wall can remain as plaster coated with a paint especially formulated for bathroom and kitchen. This paint has a water resistance built into it so water slides of and contains an anti-mold to stop the mold on walls. The bottom of the shower should be tiled as plaster would crumble over time.
Real plaster is waterproof so it could be used in a shower. But you really need to know what you are doing, how to apply the products and the correct products to use. If not the plaster will not hold up to the constant moisture in the bathroom which will cause big problems in the future.
Plaster is not appropriate for use as shower walls. Plaster is a porous material and therefore will swell on damp walls, once the plaster dries it flakes off. The health risks involved with using plaster is mold and mildew. Since not all plaster dries quickly and some may stay damp for months, plaster becomes impractical.