2. The same way software commits or Wikipedia edits are evaluated. Discussion and voting. As with OSS and Wikipedia, few would actually propose changes, but it's better than the current system (which is closer to the model of proprietary software and traditional encyclopedias).
3. As ry's node is the official Node.js, "usgov" would host the legally binding repo, and individuals would simply have their own non-binding forks. Congress's role would shift to primarily merging in pull requests.
4. I imagine most aren't interested in proposing laws any more than they are in editing Wikipedia. But everyone would benefit from a more succinct, optimized legal structure, as they do from a better source of information.
This is all really beside what I had in mind though. I don't think there's much point trying to do anything official, in cooperation with the current government. The way you improve Windows is by building a better operating system, not directly trying to change Windows.
1. The U.S. legal system is designed to go slowly. That's what checks and balances are for. It takes a long time to see the full implications of each law (look what happened when Glass-Steagall was repealed), and if the laws change every day, you can end up whipsawing with no idea what really works or not.
2. How will the laws be evaluated? In the U.S, you have judicial review, where cases come before the courts, the facts come out into the open, a jury of your peers evaluates how the law applies to those facts, and then the appellate court system ensures the law was applied correctly. If the law is egregiously wrong, there's widespread publicity and then public pressure to amend the law. How does this same sort of fact-based discovery process factor into your system, and how do you avoid it devolving into a "he said she said" contest of differing opinions?
3. How will you get public buy-in? Democracy's based upon the consent of the governed; when everybody writes their own version of the laws, each person could make the argument that they didn't consent to the other person's version.
4. It seems like this would replace plutocracy (government by the rich and well-connected) with technocracy (government by the quick-thinking and technically savvy). As a technocrat, I'm all in favor of that. ;-) But it seems like you're just exchanging one set of masters for another, and in many ways, this new system is less fair than the old one. What happens to the 95% of Americans who are not accustomed to thinking at Internet speed? They're already being left out in the cold by many economic developments; will you exclude them from the political process too?