A couple more thoughts on this --
I didn't realize it before, but this means that Hide is always worthwhile. No matter what they roll, if you have +8 to hide they will have to get 80 feet closer to spot you. This isn't clear in the RAW, which makes it sound as though Spot > Hide = failure to hide.
When you do it this way, surprise rounds become common. For example, I roll 5 on my Spot and the orc rolls 9. That's enough for the orc to spot me from 90 feet away. Now he's aware of me and I'm not. Does he deserve a surprise round? What if one orc rolls 15 and one rolls 9? Does the first one get two surprise rounds?
Maybe you should rule that the spotter becomes aware of the opponent at the end of his move (from 120 feet away to 90 feet away in this case), so that he only gets a surprise round if you're still unaware of him at the end of your move (which would put you 60 feet apart).
These thoughts don't seem like they fit into the framework of the rules, so maybe there's something about my restatement that is wrong. Maybe this is the same as saying "You get -2 for each range increment, so if you have +14 to attack you can shoot someone with AC 10 from a distance of 2 to 11 range increments." No, it's not the same - the difference is that Spot doesn't take an action and is always on, so you really can assume you're making a check every 10 feet.