This gadget would be completely useless in most American cities. Serious thieves don't wheel or ride an unguarded bicycle; they'll grab it and toss it in the back of a truck.
Most bikes here spend a lot of time in designated bike parking areas found around schools, workplaces, supermarkets...
And for that use I really think this idea could work.
You need a heavy chain lock that encircles the frame and both wheels, and is tethered to something at least as solid as a telephone pole.
I prefer a D-lock (German steel as I said

) and while you're right about the best thing being a total locking together of all the ('loose') parts of a bike to something solid, securing the frame will usually deter the "oh, look; a bike -now I won't have to walk home!" kind of thief from stealing the normal "gets me from A to B" type of bikes (not just my experience, but also that of Danish insurance companies) and those are the ones this kind of product is aimed at -I suspect.
Besides, it's illegal to use (public) lamp posts, and that sort, to secure your bike to (not that we don't all do it though)
In fact, once a hardened version is available I don't think it'll be a problem to get insurance certification for this product -especially considering the shitty locks that already are accepted by the insurance community.
I think that is a bit premature.