That makes a lot of sense. Especially for younger kids. Though I wonder if, at a certain point, the loss of financial knowledge is worth the tradeoff.
That being said, I also think that a lot of people are stuck in a bit of a vicious circle. These same people know they don't have a lot of financial knowledge, but they also don't know who to ask or how to ask primarily because no one around them would talk about money or finances.
My kids will know how much their stuff costs, and they will earn their luxuries.