Here we have a cubesat which operates in VHF/UHF. Communication with it (from a ground station perspective) is done with an Icom Radio. Would it be possible to replace it with a cheaper BAOFENG?
The usability of the Baofeng (or any radio with > 1Hz frequency step) will depend on the frequency and mode that you are using. If you use a 12.5kHz frequency step size you will never be able to tune to 435.345 MHz (FM mode) frequency, for example. You have to change your frequency step size to 5 kHz or 2.5 kHz to tune it.
Notice though that the Baofeng has a tunable step size as documented in the specification you linked (Page 11). 2.5/5/6.25/10/12.5/25kHz frequency step sizes are sufficient for FM mode communications with a satellite.
You should also take into consideration the mode. If the spacing, as the other answer suggests to consider, is not an issue, will the Baofeng actually use a mode compatible with the CubeSat? I don't know anything about your CubeSat, but keep in mind that a Baofeng will only work on FM, not LSB or USB. It also lacks the host of other features the IC910 offers, specifically for satellite use.