I'm torn
Overall, I like the idea of a word-based method of giving locations. This is based on my experience of people who cannot remember, nor are able to read out, any number with more than three digits, combined with those who cannot accurately write down/type any number with more than one digit. I absolutely agree that things like AML are probably the best way to give locations, but only as long as there is no transcription needed anywhere in the process - sometimes even 10 metres out is too much. However, any word-based solution has to be done right if it is to be used for emergency situations, and that isn't easy due to things like accents etc.
Until such a system comes along, though, many of the problems can be dealt with by a) getting people to enunciate the dots - dogs DOT toe DOT dearth is clearly different from dog DOT stowed DOT earth - and b) asking for spellings - W3E words aren't long, and can be spelled quite quickly. Again, there are accent problems if the speller doesn't know the phonetic alphabet, but it reduces the error-space quite significantly.