Interesting idea. However your model - like all interest based learning models - fails because learning is hard. How will you force kids to memorize their multiplication tables, their spelling lists... These are things that are hard to do and interesting. (note once you get good things like spelling bees are fun, but until you are good it is not fun so few kids will cross that gap)

I agree, what if people decide not to learn. My two answers are 1) they wouldn't learn in a compulsory model anyway, not really (https://medium.com/@prendalearn/teaching-is-impossible-what-... and 2) gamification can go a long way.

Actually testing this next week with a summer camp where we bought a bunch of cool, fun toys and the kids can play all day once they get their work done (x% mastered on Khan Academy, y pages read, z words written). I'm making all this up - no academic background.