Gunshy67 has made a very valid point. I doubt if most VFR pilots not using autopilot hold mode can fly within plus or minus 200 feet of their planned altitude. Throw in QNH inaccuracies and the odds shorten again.
What concerns me too is the cowboys who know full well that their transponder is dodgy but rather than pay the $60 an hour to get the transponder tested and repaired right now, they will pretend that the fault is not there (by not entering the defect into the maintenance release) but leave it to the next 100 hourly inspection when the cost is less.
Around the Melbourne flying school scene I have known owners and operators to ignore comments from ATC that their transponder on a particular aircraft is either inoperative or intermittent or plain rooted. Because each time the operator counts on good old friendly ATC being kind hearted and will allow the aircraft to continue outbound or inbound without making waves to the operator. Therefore there is no incentive to get the transponder fixed.
Until ATC are prepared to act tough against these shonks and demand they return to land at their departure airport to get the transponder fixed, then the NAS system will always have that weak link - the shonk GA operator. And believe me there is no shortage of pilots who have been brought up not to enter defects into the maintenance release lest the owner goes ape.