While monster types are not really a bad thing they are one of those rather gamist concepts that tend to lead to strangeness. Level 8 PCs being able to tussle with a big level 15 or 20 dragon would be cool, and then having it show up again with the same stat block at level 20 and really be a regular monster just feels more elegant somehow.
There is definitely some serious potential behind the idea in quite a few metagame and monster design areas.
But, the to hit delta is the big equalizer on high level vs. low level fights in 4E and earlier versions. This concept broadens and smothers that a lot.
In 4E, any monster 5 levels above the PCs is going to pretty much slam the PCs with it's +5 to hit, +5 damage and +5 to defenses.
In this system, a monster 5 levels above the PCs is going to be +1 to hit, +5 damage (presumably, possibly as much as +10), and +1 to defenses. Fights with a monster 5 levels above the PCs will be very swingy because the penalty to hit for the PCs is only 1.
I can easily see a fight where the PCs get surprise and the big tough dragon goes down before it can even flee with this model. The dice are nice to the players and everyone hits and hinders the dragon into submission in 2 or 3 rounds before the DM can necessarily pull out the Dragon's big guns (e.g. the PCs drop a bunch of effects on the Dragon).
Sure, the dragon will have a lot of hit points, but dragons have a lot of hit points now. Except for an extra round or so of fighting (because the dragon has more hit points), the dragon 5 levels above the PCs will be almost as easy to take down as the dragon the same level as the PCs and not much harder to take down than a dragon 5 levels below the PCs.
This swinginess will work against the players as well. Lower level foes that in 4E only hit one time in 3 now hit half of the time. The DM's dice get hot and lower level foes (which are rarely brought to the table in 4E, but might be a regular staple with this model) start kicking PC butt nearly as well as same level foes might.
If one ups the amount of damage and hit points every single level has to attempt to compensate for the lack of to hit and defense, then hit points and damage start becoming large numbers. For example, a PC of 40 hit points starting out at first level so that he can handle the 15 points of damage that a normal sword swing does. Hit points increase by 10 a level and damage increases by 3 a level.
Note: the ratio of hit point increase to damage increase has to be at whatever hit ratio that the game designers want a given PC or NPC to fall. For example, if the game designers want an average PC or NPC to fall if hit 3 times by a foe like in 4E, than this ratio should be approximately 3 to 1 (which I find reasonable). Less than that becomes swingy, much more than that becomes grindy.
Although WotC might consider this model, one sacred cow that I don't think that they are going to be giving up is the D20+x to hit and D6+y or D8+y damage at level one. So whatever level of hit points and damage works best here, I cannot believe that a longsword swing is going to be that much different than D8+4 damage in 5E. Using a D8 for a sword has been around since day one (IIRC, swords might have been D6+x in the real early days, I don't have my old books available at the moment) and I suspect that there would have to be an awesomely good reason for that to change.