Benefit: Most save-or-die spells are no longer available.
Benefit: Most troublesome spells (shapechange, teleport, polymorph, scrying, etc.) are no longer available, or available only at very high levels.
Drawback: Some combats will take longer, as it will be more difficult to take out large groups of enemies with one spell.
Drawback: High-level healing will not be available, so most parties will need more than one cleric, or have to rest more often.
Potential drawback: Will creature SLA's also be changed? If not, creatures with high-level SLA's, save-or-die effects, and such will have a significant advantage over the party. One demon with improved teleport at will may be essentially unbeatable.
Benefit/Drawback: Due to caster level requirements, most magic items will be low-level. No weapons/armor above +3, for example. No rings or staves(Forge Ring and Craft Staff require caster level 12). Many fewer rods.
Benefit/Drawback: Because of limited caster levels, special materials will be more valuable. Admantine, mithral, darkwood, etc. don't depend on caster level for their benefits.
Benefit/Drawback: A few skills may have many fewer ranks than normal (knowledge - religion), due to cross-class limits.
It really depends on the type of campaign you and your players want.
*Unless you want to significantly change the rules for item creation, you've automatically weakened item power significantly.
*Unless you use a different hit point system, you'll need more healing.
*Unless you change certain monsters, you'll be more limited in what you throw at the party - the CR's will certainly change based on the party's more limited spells and items.
*Unless you want the characters to be able to avoid these limits, you'll have to study carefully every PrC in the campaign - too many are already unbalanced for normal D&D. They would likely be even more so in this campaign.
Sounds like it would work fine for a more heroic (vs. superheroic) style campaign, but you'll have to be very careful concerning the challenges you throw at the party. It really comes down to whether or not your players will enjoy this style of campaign.