If I read it right, what T. Bone is promoting is a higher standard for recording that can still be played back on existing gear such as DVD players, NOT an entirely new format. Thus, the first release using the new standard (John Mellencamp's) can be played on regular DVD.
It is a step in the right direction.
I think it is a positive thing when more people, especially artists and people in th industry (besides just Neil Young and Bob Dylan) speak up for better sound quality. We all know that many consumers (although not the mass of mostly youngsters who have never heard good sound, and so don't know what they are missing) WANT better sound. That is a major factor pushing the upswing in vinyl sales (even though that remains a small segment of today's market). The more publicity there is about how poor recordings often are these days, and how increasingly fed up many people are about it, the better.
It is a trend in the world, across many industries, that manufacturer's need to make things cheaper and cheaper, much more than consumers' desire for better quality, drives what is available in the marketplace. In part, we as consumers are responsible, because we keep buying the stuff. Some speak of "The Wall Mart Effect": relentless cheapening of goods, because consumers will keep buying cheaper and cheaper stuff. That consumer behavior has made Walmart the largest company that has EVER existed (except ExxonMobil in recent years measured by sales volume only, because of the increased cost of fuel)!
If enough people rush out and start buying T. Bone's CODE disks, then more artists will join in, and it will send a stronger message to the industry decision makers: yes, we DO want better quality recordings.
This is the same guy who has been producing the Robert Plant/Allison Krauss CDs, and some other great artists. I wish him luck in his venture. Yes, I'm sure it is a commercial step that will make him more money, in licensing fees. BUT it is also a step towards better quality sound for the consumer, which is rare in today's music industry.
IF a "CODE" indication means getting good-quality sound, I'll not only go back to buying more CDs (alongside the LPs); I'll even pay a few cents more for the assurance of a CODE disk.
Or maybe if Blu-Ray turns out to sound good (I don't even know: I'm so turned off on new digital sounds I haven't even bothered auditioning it yet!), I'll buy those. But until the industry starts offering GOOD sound again, I don't plan to buy much new stuff.

Maybe T. Bone's idea will help shift things for the better. A tough task, but someone has to start somewhere. In the meantime, I'll keep looking for those good used vinyl LPs, recording tapes, and even LDs (although not all of those were well-mastered, either)...