The GM decides the state of the world before each action is declared and resolved. The action then determines the resolution.
<snip>
PCs get to make a sensible decision to the best of their ability and information, in an attempt to better resolve the situation in their favor. You can make a decision that will result in a strictly better outcome.
For practical purposes it is impossible for the GM to decide the state of the world, in all relevant respects, before each action is declared and resolved. Which guards know the password? Is their knowledge out-of-date due to a password change? Where is everyone in the castle? How many of them might recognise a disguised PC? Which accents will they treat as foreign or suspicious?
In my experience, the practical upshot of the sort of approach you advocate - once the fiction becomes richer than the artificially austere environment of a classic D&D dungeon - is that the GM has to make stuff up as they go along prior to actions being declared and resolved,
or else introduce new fiction into the situation as part of success or failure narration. The first case puts the shape of the fiction primarily into the hands of the GM. The second case does likewise,
unless (and to borrow
@Manbearcat's phrase) the GM is on some sort of "budget". A skill challenge is exactly that sort of rationing device. The GM has no more than N moves (and maybe 2 fewer, if the players roll no failures) before they are obliged to narrate a final conclusion to the situation. No more than N troublesome townsfolk, password-forgetting guards, suspicious responses to accents, etc.
Again speaking from my own experience, the closed scene approach (or other, somewhat comparable approaches, such as Burning Wheel's combination of
intent and task,
say 'yes' or roll the dice and
fail forward) has two benefits over the approach you advocate:
* It produces more interesting play, in the sense that the players do not have to try to puzzle out the GM's - perhaps ad hoc - conception of the fictional situation, and instead can follow their own sense of the fiction and (if their checks succeed) make that part of the shared fiction;
* It produces more interesting fiction, in the sense of fiction that more closely resembles the inspirational fiction (eg JRRT/LotR, REH/Conan, etc).
Here's an example to illustrate what I mean - the resolution is Cortex+ Heroic Fantasy (ie Marvel Heroic RP adapted to a different set of tropes - in our case, mythical Vikings), but skill challenges are similar enough:
Cresting a ridge and looking down into the valley below, they can see - at the base of the rise on the opposite side - a large steading. Very large indeed, as they approach it, with 15' walls, doors 10' high and 8' wide, etc. And with a terrible smell. (Scene distinctions: Large Steading, Reeks of Smoke and Worse.)
<snip>
Meanwhile (I can't quite remember the action order) the scout has climbed up onto the top of the pallisade, gaining an Overview of the Steading asset
<snip>
the swordthane opening up negotations with Loge, the giant chief, including - in response to a demand for tribute - offering up the steed as a gift; the scout, after successfully parlaying his Overview of the Steading asset into a Giant Ox in the Barn asset, leading the ox into the hall and trying to trade it for the return of the horse, and failing (despite the giant chief's Slow distinction counting as a d4), and subsequently avoiding being eaten (a stepped-up Put in Mouth complication, as per the Giant datafile in the Guide) only by wedging the giant's mouth open with his knife (a heavily PP-pumped reaction roll)
To me, these events seem to more closely evoke the feel of Viking myths and related fairy tales - spying the ox, and then trying to trick the dim-witted giant chief into trading back the horse for his own ox, and then narrowly avoiding being eaten when the deception is seen through - than would happen if the resolution was based on GM notes + discreet action resolution. (What happens if the GM doesn't think to note a barn in the steading, or a giant ox? Why should such an interesting fictional element be contingent on the GM thinking of it?)
Here's an example from a 4e skill challenge:
He invited them back to his home, where it quickly became clear that he didn't really want their company, but rather wanted them to help him with a problem - he was expecting a visit in a few days from his Duke overlord, but his special apple grove was not fruiting as it normally would.
This was an adaptation to 4e mechanics and backstory of the scenario "The Demon of the Red Grove" in Robin Laws's HeroWars Narrator's Book. The reason for the trees in the grove not fruiting is that a demon, long bound there, has recently been awoken but remains trapped within the grove, and hence is cursing the trees. Mechanically, this was resolved as a skill challenge. First the PCs had to endure the demon's three cries of "Go Away!" (group checks, with failing PCs taking psychic damage - the sorcerer, who is also a multi-class bard, was the most flamboyant here, spending his Rhythm of Disorientation encounter power to open up the use of Diplomacy for the check, which in the fiction was him singing a song of apples blossoming in the summer). Somewhere during this process the cleric-ranger and invoker both succeeded at Perception checks and could hear the high-pitched whistling of a song bird. And the sorcerer's Arcana check revealed the presence of the demon - an ancient and mighty glabrezu (level 27 solo, as I told the players in order to try to convey the requisite sense of gravity).
I don't know how the discreet action approach factors in the Elven singing of a song of apples blossoming in the summer, or even really how it gives a clear "weight" (or as
@AbdulAlhazred sometimes puts it "valence) to the Perception and Arcana checks that reveal the truth of the magical situation.
In a skill challenge these are easy to resolve. And the resulting fiction is colourful, engaging, and reflects the players' as well as the GM's conceptions of the situation.