I think this project is a great idea - I'm surprised Linden Labs doesn't do something similar to increase the value of Second Life. As much as I am happy to see grants for builders who are planning something cool, at this point I think I would prefer to see such grants aimed at builders who have already achieved a build that adds value to SL, but are not commercially viable.
For example:
http://world.secondlife.com/place/faa42959-dc91-d82c-2f9d-a9c3171212ad
St. Catherine's Monastery - Sinai Egypt, is a loving reconstruction of a world historical site, with galleries of rare artwork, which allows you to experience a walk through. This sim does not generate income, is expensive to maintain, and is in danger of closing due to lack of funds. SL is greatly diminished by the loss builds such as this. If they cannot find funding, then SL will only be left with malls, stores, clubs and other sites that might be commercially viable, with some of the richer builds disappearing or moving to less commerical/developed grids such as OS Grid.