My main concern with it is that it forces you to write the document in the same order you want the code to be extracted, which may not be the best order for explaining things. That is why classic Literate Programming tools like noweb[1] allow you to name the chunks of code and then arrange them into the generated files as you wish. You can see an example of this in action when I'm assembling noweb.php[2].
Also, agreed on the point that not every piece of example code is suitable for running as a test, so you'd optimally want some sort of annotation for that. Github-flavored Markdown[3] has the code block fencing syntax that would allow metadata like this. Something like:
```coffeescript
# Just a regular, non-testable example
```
```coffeescript;test
# Example that is also a test
```
Actually, this same approach could be used for working with named chunks like noweb does.1: http://en.wikipedia.org/wiki/Noweb
2: https://github.com/bergie/noweb.php/blob/master/README.txt#L...