While I can certainly understand your concern, I think you're focusing on the wrong thing Steve..
The suggestion is to eliminate dialogue. So, yes, from a certain point of view it is limiting, but in the broader sense, it would force the writer to focus on writing visually, as filmy stated.. which is ultimately the essence of the film medium anyway. Telling a story with pictures.
This was done successfully for many years prior to the advent of synchronized sound tracks. I honestly think it's a good idea because it directly addresses an issue that rears its head time and again in small (and often not so small) indie projects.
By eliminating dialogue, you can not use it as a means of exposition. This is something that happens far too often. There are many examples, both on this forum and around the net, that clearly illustrate this point -- characters telling us what's going on, rather than showing us visually through actions, expressions, etc.
Once the visual part is solid, the dialogue supports it, rather than replaces it. So, in effect it's the same as telling people just starting out in film making to shoot a bunch of shorts, rather than jump into a feature project. Practice the basics, hone your skills, and then move on to projects with a new element.
Example: Shoot a bunch of shorts with locked down static camera shots. Work on blocking with the actors within that constraint. Then, move on to moving camera shots, using what you've learned/practiced of blocking, and adding the movement of the camera to further enhance the scene. Then move on to something else, over and over, ad infinitum.
Here, it would be the same thing, tell a compelling story visually, without relying on dialogue (which, lets be honest here... more often than not becomes a crutch that writers lean on). Perfect that, and you'll have something more compelling, watchable, and worth your "time, energy, money, creativity, whatever" than a mediocre script with dialogue. Then, you take what you learned from that and move on.
I'm not saying anyone in particular is a horrible writer, it's not my place to say, not being a writer myself. But fundamentals are important, and since anywhere between 55 and 90% (depending on which research you look at) of communication is non-verbal AND this is a visual medium, why wouldn't a focus on that particular fundamental element not be a worthwhile challenge? The majority of indie scripts I see, here and elsewhere more often than not is extremely dialogue heavy... Lots of talking heads and such.
So, I think perhaps that you're not seeing the whole forest, but rather are focusing on a leaf. I think if you try to look at filmy's suggestion from a different point of view you'll see that it would in fact be beneficial to improving skills that are valuable in film making -- both in writing and production.
