That's just giving up on all the land we already have. That, for a starter, seems pretty defeating.
edit: We keep on forgetting that our government (the US) was created on purpose to be very slow but ultimately fair. That's the inefficiency, yet it's still a great place for startups. That, coupled with our 300m citizens, makes something like this harder to do in a country like this. That's why we haven't been too successful in creating startup communities outside of 2 or 3 places in the entire United States.
Yet, this can work in a lot of places. Or, rather, we can try to start applying it in a lot of places. Smaller places that have seen similar successes. I'm thinking Dubai, Israel, etc.