This kind of schooling sounds like the same kind of education as the highly successful Montessori teaching method.

http://en.wikipedia.org/wiki/Montessori_method

"The Montessori method is an educational method for children, based on theories of child development originated by Italian educator Maria Montessori in the late 19th and early 20th century. It is applied primarily in preschool and elementary school settings, though some Montessori high schools exist.

The method is characterized by an emphasis on self-directed activity on the part of the child and clinical observation on the part of the teacher (often called a "director", "directress", or "guide"). It stresses the importance of adapting the child's learning environment to his or her developmental level, and of the role of physical activity in absorbing academic concepts and practical skills."

"The Montessori method discourages traditional measurements of achievement (grades, tests) under the premise that it is damaging to the inner growth of children (and adults). Feedback and qualitative analysis of a child's performance does exist but is usually provided in the form of a list of skills, activities and critical points, and sometimes a narrative of the child's achievements, strengths and weaknesses, with emphasis on the improvement of those weaknesses."

This pedagogical method is quite interesting and I recommend respondents at least skim over the Wikipedia article before criticizing here.