I hate to have to ask, but...
Firstly, how sure can you be that the "ebb and flow juiciness" came from the new diagonal rule, and not from the withdraw and charge rules?
Secondly, and more to the point, did your resident power-gamer go out of his way to try to abuse the rule?
Because to a large extent that's where the problems are going to lie. Aside from some cognitive dissonance from those of us who are offended by such things, the rule will play just fine in the 'normal' cases. However, as soon as it hits a player who is out for every advantage that they can get, it will fold up like a cheap umbrella. And there is are a very great many such players out there, many of whom have been trained in that very characteristic by the relative rigidity of the 3e ruleset.
Just before Christmas, I ran an absolutely disastrous Shadowrun game for all of two sessions before it imploded. When I analysed just why the game had collapsed, I came to the conclusion that the designers had built the game under the assumption that the players would 'play nice'. Naturally, my resident power gamer had immediately latched onto the Troll race, maxed the Body attribute, boosted it further with cyberware, and then layered on armour on top of that, generating a character who was completely immune to harm.
It is one of the great strengths of 3e that the system is so robust. The various exploits that have been found have actually been relatively few, given the vast player base, the thousands of pages of official supplements, and the lifespan of the edition. Much of that is that the designers didn't stint on the mathematical rigour when building the system. It now seems that that rigour is being sacrificed in the name of 'fun', which concerns me greatly.