It would work only if you are talking about reducing only the driver distance per tier. It would take care of distance differences between tees while allowing all to use any driver. Don't think it's a good idea if applying to all the clubs in the bag.
If using either my G10 or TM irons I want them to work at the rated distance intended, plus what we are all used to. After all, didn't we have to learn how to use them when we got them.
To lose 3% off of the driver wouldn't be that big of a deal. Over time you would learn to use it to hit different areas of the fairway to still get the distance out of it.
As a PRO, I had the 255 yard R9, yes with that I could keep up with the 275 yard Master R9. But to give the 275 to someone from the shorter tees, with its rated distance, NO WAY