Well I don't think it will catch on all that much with big publishers (who shrug off failure and just move on) I can see this becoming popular with smaller publishers who rely on word of mouth reputation.
The main thing to remember is that since how good something is is completely subjective the publisher will always hold the cards. So while I applaud Stardock for admitting failure and appeasing its customers I can't help but think that if you make a stinkypoo game the only way to fix the bad PR that comes along with it is to make a really good game. This is sort of how the industry already works, no horn tooting required. The real danger for Stardock is that if the free game they offer isn't at least passable the negative PR will likely increase.
It should be noted that Sony tried something like this back when PSN went to hell, they tried to appease gamers with freebies, not sure that was Super Effective...
