The article says:

One potential stumbling point for WebEquity, which TechNation writer Kim Heras picks up on, is the apparent lack of support in working out team agreements. For now, Middleton intends to leave the specifics of equity distribution deals and IP rights to the collaborators on each project to figure out themselves.

No existing term sheets seems to be a huge barrier for getting the project adopted.

say cash strapped writers looking for an editor for instance.

The traditional model is that there are publishing houses that have expertise in judging which book is likely to be successful. A cash strapped writer can go to one of these and then the publishing house pays for all additional expeneses.

On the other hand the average editor doesn't want to invest the time to see whether certain books are viable before investing into the book.