I'm interested to see where this goes, but one of the problems with literate programming is that it means that in addition to being a good programmer you also need to be a good writer. In other words, if you are a good programmer and a bad writer you are going to produce net bad work since your writing will confuse people who might otherwise have understood the code on its own, and if you are a good writer and a bad programmer there is a chance this will make it harder for others to realize your implementation sucks since it may be dressed in the most brillant, clear prose possible. (Of course one can make the argument that brilliant clear prose is a sign of brilliant clear thinking and hence code, but I am not so sure.) It also opens up the door for an entirely new dimension in code reviews. Imagine your resident grammar nazi jumping into code reviews now to perform edits to paragraphs upon paragraphs of comments. (This is probably the same person who agonizes over class names, so maybe you're already used to this :))

I've found that there seems to be a decent correlation with writing skills and programming skills, but that's far from a fact and I've worked with people in every spot in the 2x2 skills matrix.