It's called 'the ransom model'. It has been used for plenty of things, including the open sourcing of software (most notably blender).

The big problem with this model is that unpopular works never get made. Even though most good works do have an audience, you do get some people making things that are ahead of the curve, and people aren't ready for them. It can take years before they get noticed, and they could never get made solely based on people paying upfront.

The book still had a huge impact, so it was a success in terms of the values Hoffman espoused in the book.