I think you have to start by making a distinction between the institution of government and the process of governance in which government, business, and civil society all participate. The idea is, a FOSS-inspired change in the process might improve governance decisions.
I think of it as government of the ones who show up, and it already happens, to some extent, everywhere. In democracies, most of the decisions aren't made by elected officials, but by bureaucrats. The people doing the work. I recently spoke with a young woman who was a junior staffer in one of the highest offices of the executive branch in the George Bush administration. She said that most of the decisions made in the US capitol were actually made by people in their early twenties, just out of college, who were willing to work long hours for peanuts. If these young folks had majored in CS and Math instead of PoliSci and History, they'd have been coding instead of drafting legislation. (Joel Reidenberg and Laurence Lessig have both written cleverly on the parallels between code and law.) In authoritarian states, like for example China, the bureaucracy plays a similar role (wish I could find a reference quickly).
Most existing government structures keep some people away from the decision-making process. Law-makers hide the code of governance (the law) until it's ready to be shipped. Some of us (I don't know the metagovernment people, but I like the way they think) who are interested in both law and code think there's something to learn from FOSS. Maybe the process can be opened up. Let's acknowledge the underlying process of governance, which doesn't have much to do with voting, and more to do with people making decisions by default, because they're in the room when the question comes up.
There are plenty of problems with ideas like this. Of course, you probably don't start tinkering at a national level, but at a local level where the stakes are lower. Maybe the analogy between governance and coding is a false one. But you can't know until you give it a go, see what problems there are, and try to fix them.