While I applaud the elegant nature of this USB centipede concept, it brings up (as most concepts do) as many questions as it answers. How will power be isolated in one or another device? How much will an integrated USB controller increase the price of each device? What if you need to unplug the one in the middle?
And of course, while it’s not nearly as cool of an idea, a good USB hub will do the same job with fewer complications.