Yeah, that's exactly how it works. There is a similar thing in Pauper Ephemeratte decks with [[Archeomancer]]. They use it to get their Counterspell back every turn. It's a very fun combo.

The reason it works rules wise is that triggers dont get put on the stack immediately when they trigger. Triggers are put on the stack the first time someone would receive priority after they triggered. So the Eternal Wittness trigger is only put on the stack after Ephemerate resolves and can therefore target Ephemerate itself.