Scratch is a neat system. But I found it to be slower than just typing code. I know that's not the point, but my thinking is that doing something graphically with lego blocks should be faster than typing out all the characters one at a time.
I've worked a bit with graphical dataflow systems (like LabView) that can actually realize a much quicker time to operation than hashing out equivalent code by hand.
It is much slower for me to build a WizBang program than to fire up vim and write some code. I'm not sure if visual programming could ever be faster than a text editor, as a visual block (in WizBang anyway) usually corresponds to one or two lines of actual code.
But speed is not the point at all in WizBang. The point is to present a clean and simple environment in which beginners can build real programs without having to type more than variable names. I feel it is a much easier way to introduce programming than having someone install Visual Studio and writing a hello world program.
This is definitely a cool project. I think, introduced the right way it would certainly work along your intended concept.
There have been a few attempts at pushing the complexity down so that non-programmers can work with complex things. Like Data Flow programming systems for example.
Showing somebody how to build a simple data processing app in one of these systems is very rewarding as they realize they can coax the machine to do what they are telling it. But I've mostly dealt with adults, not kids.
I've worked a bit with graphical dataflow systems (like LabView) that can actually realize a much quicker time to operation than hashing out equivalent code by hand.