I have actually been using this system in my game since, well reading it in 2e. I even developed NPC Designer to create spell lists based off this same idea so it could be of better use to me then just blind generation.
On those occasions spell users can select a spell, I normally only allow them access to "common" spells unless they either have access to or provide means to allow different spells to be added to this list for them. I personally think this adds a lot of depth to the campaign.
That is fantastic; I would love to see your output with that

On another note to everyone:
What do you consider your 'lost' spells or 'rare' spells in a setting? Perhaps it may be Epic spells, or great spells that are beyond reach for one reason or another.
I have also been thinking about Tolaria and the Academy. Get a lot of powerful archmagi around, there is a very good chance SOMETHING is going to blow up/planeshift/exile itself into the Nothing.
Slainte,
-Loonook.