Acceptance of textbooks - verification of quality and being usable in courses - is a big hurdle. It's the equalivent to the problems open access journals are currently striving to overcome - building a reputation takes time, and without it viability in education/academia is a difficult proposition. Hopefully this is a useful way to start building momentum - I think it would be an excellent way to get more educational value for the dollar.
If the idea can gain broader acceptance, there are a number of interesting ideas for open source textbooks that can be tried. I like the idea of developing a K-12 and college educational plans in an "open source" fashion, identifying the resources needed, and mapping out the missing pieces as a guide for where to concentrate efforts to create open source teaching materials. I suppose there is only so much you can do to "solve" the problem of what constitutes good teaching materials, since that will vary with learning style, cultural and linguistic background, etc. but it would be nice to have a systematic framework and forum within which to try, evaluate, and evolve ideas. It will be interesting to see whether, as open source devs age and start having families, interest in open source educational materials also grows - that's when the question becomes directly relevant and worthy of resource commitment for a lot of people.
Ideally, open source materials could be managed for "dependency satisfaction" - i.e. mastery of the material in grade 6 materials associated with a project provides the necessary and sufficient foundation to learn grade 7 materials, and so on. That was sometimes a frustration for me growing up - structured resources with fine-grained pointers like "understanding of this concept requires understanding of X, Y and Z" from previous years would have been nice. Sort of "knowledge building a.l.a math proof."