For me, the problem with this coin is it effectively throws away the benefits of proof of work while retaining it's drawbacks, thus not functioning as a decentralized, permissionless system as cited in the first post.  In that instance, you've created something that functionally falls into the same category as proof of stake, just with higher overhead and worse economic incentives.  The economic incentives are so misaligned, the coin doesn't even work at all at release.  The solution, CFB calls it, is "training wheels", or checkpoints.

The coin's value should theoretically increase as the security of the network does, at least that's how normal systems function.  A baseball player that hits 100 home runs a year usually makes more than one that hits 0 home runs.  With this coin, the security at release is 0, but we're supposed to believe the for-profit issuer of the coin that the price should be high when the network doesn't even work.  We're then supposed to all willingly join in on this extortion scheme and pay for security now which doesn't exist, with the naive dream it will some day in the future.  The way the coin is designed is not really conducive in creating a network effect for this to happen though.  You're buying something that needs to go from 0 to large tipping point instantly with nothing in between.  It's like hoping dogs will randomly begin walking on two feet and start talking out of nowhere.

Anyway, as I was saying, since the coin already functionally falls into the same category as proof of stake, and the outside entropy of the coin serves no real purpose, he may as well of just created a closed loop proof of stake derivative in the first place and attempted to scale via something like deterministic block production.  You'd end up recreating some system like Bitshares, which like all proof of stake systems, is also a permissioned ledger, not anti-fragile, horrific fault/state recovery, etc etc.  The point is, this coin is not a valid contendor or replacement to Bitcoin, neither are the proof of stake coins that share many of the same characteristics.

Real world example

Let's say North Korea is sanctioned by every nation on earth for smoking too much marijuana.  They're now cut off from all international trade and economically suffering.  If Bitcoin is the world reserve currency, they can use their technological know how to start mining Bitcoins because it's a permissionless system.  They now have a currency they can use to buy food and supplies from a semi-friendly but not complete ally proxy nation like China.

If IOTA was the world reserve currency, they do not have a permissionless entry point into the system at all because Bitcoin is a system of permanent coin turnover and IOTA isn't because it's a permissioned ledger.  They're now forced to attempt to trade something with China to acquire IOTAs, but maybe they don't have anything China wants so they can acquire no coins at all and they're completely locked out (obviously not a decentralized currency).  

Their best case scenario is, since China only sees them as useful idiots and not a real ally, they will then charge them with a markup for coins, along with another markup for whatever proxy goods they want through them.  Let's not forget the Come from Beyond day 0 extortion tax either since he cornered the market by design at release.  Thus, you have now been extorted three times in this chain of command due to it being a permissioned ledger and not a real decentralized currency.