One of the big problems that it would solve is the ease of being able to go back and get past submissions, so you A) don't have to dig through your emails to find it, and B) don't have to ask them to send it if you're new to the group.
As for your first point, I could get around that easily. When a piece is marked for critique, I take a snapshot of that document and send it to you in email (the system supports revision control, so you can easily get to your old versions in case you want something from an old copy). Your email address is never made public to *anyone*, even the other list members. As it is, the second you send a submission to the reading list, everyone else gets your address. By the system sending you an email, you now have two ways of getting it: the old way, or through the site itself (new way). I personally dislike using email. I have well over a dozen accounts I have to actively keep track of, and even with filters I sometimes get things lost in the noise.
As for the submission process being clunkier, I'm not quite sure I can agree. Right now, you have to submit a document via email (which you have to pull out of your big document already, unless you actually create new documents for each chapter, which I know I don't, at least), and then you have to come here and create a new thread to discuss it (although sometimes other people end up creating your thread, but that's just pushing the burden on to someone else). Compare this to copying your chapter and just pasting it in a box and hitting submit. All formatting is preserved, a thread is automatically created, and you don't have to worry about whether everyone in the list will get it or not (which is apparently a problem for some people already). Even if they didn't get the email notification, logging into the site would show the same notification and they could access it that way. Even better, you'd have the ability to access your own works when you weren't at your computer, as long as you were at *a* computer with internet access.
As for the browsing process, I don't know how difficult it would be for you to find someone's submission when there's a group dashboard window that lists all the group members, and likely their recent submissions. It wouldn't be any more difficult than finding the thread to post on in this forum for a given chapter by a given user. The thread itself would be attached directly to the submission page, similar to how deviantArt has comments below the piece. Comments would be tracked by revision as well, so you would know that a given comment is/is not part of the current revision you're looking at. Almost all of this is transparent to the user (unless they want to see their past revisions).
I'm a big fan of open document formats, too (I can't stand Microsoft, et al for creating proprietary systems). At any time, you'd be able to pull your documents off the list (probably in RTF format, since it's the easiest to generate programatically), and you could always restrict your external access to "private" to prevent anyone from seeing any work you wanted to.
Now, I'm sure I don't have all the answers, and I honestly don't know whether it's right for RE. I'm building it anyway, because *I* already use it for a lot of my writing, and it already supports collaboration so that my friend and I can work on the same book and see what we're each writing. If nobody uses it, I'll live, but I do get warm fuzzies when I find that something I did has a valid use outside my little world. At some point, I'll consider the site ready for outside beta testing and then I'll create a thread on it to gather feedback. At that point, we could discuss shortcomings, features that are needed, and *possibly* make it something that RE (and other writing groups) could use to make their lives easier.
And then I'll go on to solve world hunger.