I like the idea, although the allies table is a bit wider ranging than I'd really expect. But there are plenty of armies I've always fancied trying, but wouldn't want a couple of thousand points worth of... thanks to having a Tau army, I can now do that and be able to use them all pretty easily.
I think it's fairly well balanced as it is - needing to take a troop & HQ choice makes it an expensive option when what most people are really looking for are fast attack and heavy support choices. For the games up to 1500 points that I'd usually be playing, then you can only really look at it if you can get a really strong (or really cheap) option to fill those two mandatory slots. Games above 2,000 points, I think the double FoC is probably more abusable than allies in general are, thanks to allies restricted FoC in the 'good' slots.
I really hope that GW will use it to add things like Merc and Pirate lists in WD, or more niche variations of standard codexes. In future codexes, I think the impact I'm expecting is that we'll see very few armies with very strong core troops - troops choices will remain very vanilla (possibly unlocking the most interesting stuff with expensive HQ choices, or special characters as they are now), to make sure they don't open up too many potentially broken combinations.