I quite like the idea, but not that the higher rated player (as black)progresses after a draw. I'd sooner colour was decided at random - after all, the luck of the draw determines who plays who, so why not colour as well? - with the lower ranked player progressing after a draw.
Even then there are problems though - what happens if I start the match at say 1800 and my opponent at 1780, but when a draw is agreed I've dropped to 1785 and they have risen to 1790?
Come to that, what happens in the current Duel format when there are a pair of draws or one win each? Assuming both go through, there is almost as much possibility of abuse as in this proposed format, and I guess it hasn't often occurred (or at least been proven) else the format would not be so popular and I would be able to sign up for one before it was full :-)