At least half of the record shops in Hong Kong display at least some records on the walls in that fashion --usually above bins or on smaller areas between shelves. It's highly functional, because you can easily slip records in or out. They are also commonly used (with close spacing) to display CDs.
In a home setting, it would allow you to regularly change the records on display, to suit your whims and avoid boredom, but you could also just as easily leave the same favorite records up for years if you preferred. I'd say that kind of easy flexibility is this approach's greatest advantage.
I'm not sure I'd want my listening space to look that much like a store, though (which is what I associate that approach with). I might prefer individual frames -- or at least strips that looked a little bit nicer, perhaps nice wooden molding/framing strips instead of the "industrial" aluminum channels. If the aluminum strips don't scream "budget record store" to you, though, and you like the "clean" lines of them, then why not?!