It appears to have been developed into Iota: https://bitcointalk.org/index.php?topic=1216479.0 , and their white paper gives further references to other people talking about DAGs. So it seems using a DAG is not novel, though it also means it's not crazy. What hasn't been pursued though is the combination of the simple TaPoS idea with a DAG, as I suggest here.

One advantage of my scheme over this is that my scheme gives stronger incentives for adding to young nodes, both via transaction fees, and thanks to the rule that each parent must strictly expand the set of ancestors. It also doesn't rely on transactions "approving" other transactions to ensure internal consistency. Instead that is a requirement for any valid TDAG.