I don't agree with this plan partly because the old Con Con took so much work and partly because I think the game is better with a federal government that has power. If it has power, then people would want to run for positions on said level of government, and that enlivens politics; people won't stay in regional politics forever just because it's the only branch that matters. This layered element just wouldn't be there with a Confederation; it would just be glorified regional politics with a layer gutted of significance. I support strong regions, but this is a step too far.
I think (I hope!) the idea would be that having separate nations would lead to diplomacy—that the idea of it being a "Confederacy" would be loose indeed.