I haven't camped out there since I was a kid (20+ yrs ago) and haven't been out there in a couple years.
Generally, Cape Lookout is great place to spend a day. However, there are a few points to keep in mind.
No cars on the island (however there are a couple and a few ATV's some inhabitants own), so you either get there by boat or ferry, then have to hump it beach side along with all your gear. There's nothing there except what you bring, so from that point of view it's fantastic if you really want to get away (quiet nights). Beach camping is what it is, and very dependent on the wind/weather.
If you're looking for a slightly more accessible alternative for "beach camping", you can try Freeman Park in Carolina Beach (Wilmington) or head out to Ocracoke or Hatteras.
Almost all locations will have limitations on campfires (normally below the high-tide line), but at least you can have something.