I have always thought this project is interesting but why use it over JSONP? For starters, JSONP is as close as you can get to be a standard for cross-browser scripting. Additionally, it seems somewhat clumsy and there has got to be some limitation on the information the data URI scheme can communicate. I have always admired the other though because I think this is an extremely clever hack.
I want data from a 3rd party API _not_ code. If I call Google's search API I want to get back an array of search results, but they can run arbitrary code on my page if they feel like it.
I want them to call back my supplied function with the data. That I have to allow them to execute arbitrary code they supply to do that is a flaw.
Having said that, using CSS as the delivery mechanism seems pretty exotic, so I'm not advocating this as the solution, but there is a problem out there.