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I think it's an excellent idea. It represents an incremental step towards getting people out of the system - if only for a time pre-trial - and keeping them in society as productive humans with their dignity somewhat more intact.

In fact I'd like to see restricted freedom and monitoring systems like this put in place for people who would be in jail otherwise, not just those awaiting trial.

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Yes. Our system is based on the premise that people are "innocent until proven guilty" but in practice, people that have money can bail out of jail and people who don't, remain in jail. This is fundamentally unfair. While incarcerated, someone can loose their job, housing, and cause sever disruption to their family. Because of these pressures, people will often plead guilty to a crime just to get out of jail. And to your later point, we agree and we have spoken with potential clients who are also interested in increasing the number of people who are able to serve their sentences outside of physical jails.

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