After MUCH tinkering in various games (some wargames which were pretty widely played) I am of the opinion that this sort of 'build your own power' is not ever going to work. IME you have to have some neutral arbiter to look at it and decide if its borked or not. There's just too many ways to create subtly OP stuff this way, and players WILL find it ASAP! Now, with 4e, as it is, there are some powers which are undoubtedly as good as anything you will make with the Krusty System. HOWEVER, you only get each ONCE. That is a really key part of 4e, you can't take multiples of a single power. With any kind of system which is this flexible though, you effectively can. You can just replicate the same OP combination 6 different ways. It might not be IDENTICAL, but it will be pretty close, and then the game turns into spamming the same broken shtick 1000 times.
The other flip side of it is that there's not much to be gained really. In other words, players are going to quickly home in on the combinations of elements that they like, and then stick with them. So they don't really NEED all this flexibility! The fact is, a decent well-thought-out power list already will give you all the variations you are every going to use in actual play.
What I conclude is that 4e just needs all the cruft knocked out of the power lists. If someone were to go through the wizard and simply delete all the stuff which is just one more pointless variation on the same tired theme, and just generally look at the list HOLISTICALLY then wizards could likely go down from 1000+ powers to 250 without any actual noticeable decrease in their range of options.