On the face of it this makes complete sense for those wishing to take the integrated route and whose wish is only to progress to the airlines. I don't really see why the products of the scheme would be low quality. Any body ever read "Zen and the Art of Motorcycle Maintencance"...subject meets object...with this the employer gets no more and no less than they need for junior F/Os.
Essentially, it strikes me that this kind of training would be horrifically expensive for fully self funded students and extremely cost effective to the larger airline (the guys pushing for this?) for sponsored/part-sponsored students. Therefore I would imagine that the products of that training would expect to be only employed by airlines (and the accompanying salaries) or the sponsorer controls their career from that point on (for a few years at least).
In my mind that still leaves a gaping hole for the small jet carrier market, TP market, corporate and other no less essential commercial pilots ops. These 'small' operators are probably not in a position to fund or adequately renumerate junior F/Os who have come through this process. The modular route will still be essential and the larger airlines will still value real experience so long as somebody else has paid for it.
To summarise, this seems to be a modification of the integrated route. Anybody using this route would expect good pay from the off. They will be trading that for fewer career options down the road.