It's a potentially clever setup. The devil will be in the detail. We would still be a rule taker and not maker, and how EU regulation and ECJ oversight (or alternative in name) is configured for the UK is core detail. Detail that Brexiteers won't be happy with. It would be a Norway + controls on free movement; which if May could pull it off would be a massive achievement. Off the bat there are 2 essential problems:
1. If the deal is 'too good' for the UK other EU nations will either reject it or want it as well. Norway for example would want the same setup as us. That would undermine the EU and they would have to reject our proposal or undermine their own union that allows free movement and open trade.
2. Brexiteers won't like us being rule takers, which we'd have to be to maintain open customs borders. But it's a clever setup where we could in theory maintain open trade and control FoM. In that sense it's a carrot cake and eat it.
There are so many interests and positions to mediate through, I just can't see it sticking however. I am probably the only one on here that respects Mays efforts on Brexit. Quite how she has managed to meddle through with a divided party and seemingly impossible mandate is, you have to say, impressive. But despite that, with the timeframe and the amounts of interests to be dealt with in the EU and at home, it will be miraculous if she can pull this off.
The proposed deal is still a fudge, but pull it off and it addresses the core concern - free movement - so maybe it has legs. I like the ideas but won't be holding my breath, the chances of delivery are not stacked in our favour.