Interesting idea. I would just use something like DWM, a lightweight tiling window manager. You still get the simplicity but with a bit more flexibility. Most people will probably quickly hit a deal breaker with just using Emacs as a WM.
I agree. He's not really using Emacs as a WM, so much as using no WM, and doing as much as possible within Emacs. Note that Emacs can be used as a WM, with a little effort: http://www.emacswiki.org/emacs/EmacsXWidgets
I much prefer my current Xmonad setup to this "Emacs WM":
1) My windows are all fullscreen, whilst his are stuck at their app-specific defaults.
2) I can use multiple desktops (in practice, each one holds a different app, including 2 instances of Emacs)
3) I can show one desktop on my laptop screen and another on an external monitor (or occasionally a projector). I have no idea how his setup would cope with multiple screens.
4) I can have long-running external windows. He must close his before returning to Emacs. Whilst I could live without this, it would be a pain. Even if I only used each app temporarily, I'd have to wait for them to start up every time.
5) I can run slow Emacs applications in a separate instance. I read my mail with Gnus, which gives me four options:
5a) Run Gnus in my main Emacs instance, which will freeze every time updates are fetched.
5b) Start a separate Emacs instance for Gnus, which I must wait for as it fetches updates, since it is overlayed above my main Emacs instance.
5c) Start a separate Emacs instance for Gnus in a terminal, which of course limits me to a character-based interface, and causes key conflicts between the outer and inner Emacs instances.
5d) Have a long-running GUI Emacs instance, fetching mail on another desktop, which doesn't interfere with my main Emacs and I can switch to instantly whenever I like.