If you have the correct gages for the strings, GDAE will work for chords. In fact it was a jazz variant in the thirties. I play chords on mine all the time, it just doesn't sound like cgda as it is not as brilliant. You won't sound like Buddy Wachter no matter how hard you try <G>
The 17 fret gages might start at .044. Get a D'Addario Octave mandolin set and start from there.
There are two reasons why you don't see chords played in GDAE (or Irish) tuning:
1) It is not in the tradition to do so. The GDAE tradition is about 40-45 years old and has historically been melody playing on the banjo. There are some artists such as John Carty who will use chords or incorporate chords in the melody playing, so this is changing. In the earlier use of the cgda tuning in American Irish dance bands such as the Flanagan Brothers, chord melody and chord backing were both used in a similar manner as the other dance bands of the time. They just played irish music instead of jazz.
2) Irish tenor banjos are typically set up with a higher action in order to take advantage of the increased volume and to make playing single strings a little easier. For example, my action on my Masterclone is 5/32" at the twelfth fret using a 3/4" bridge. If I wanted to play chord melody on it and be able to play smoothly, I would use a 17/32" inch bridge which is as low as I can go without buzzing the strings. I give up a little volume and tone for playabiltity.
This is on a 19 fret instrument, a 17 fret instrument would have the same needs, but would not be as good to play chord melody because you are missing two frets that you could use and the sound is less brilliant which means that it will not cut through a band as well.
If I was going to play in a jug band I would get a 19 fret banjo or use a banjo mandolin but only use 4 strings - a banjo uke might do also.