I think you showed this (or the premise of this idea) on HN a month ago or so. It still has the same problems as it does then... IF your core audience is still writers as defined above.
1) Writers write in revisions, and don't like to have every word they change critiqued by their editors/producers/etc.
2) Writers don't like markdown -- they want WYSIWYG. This feature alone makes me feel like your goal was to make this tool for technical people.
3) I think a lot of meaningless changes would get jumbled up in the mix if you're writing something long. If you're writing a novel, it would be nice to go between different versions of the novel, but perhaps a bit too much if you had a commit for every punctuation mark.
This being said, I'm sort of interested what you think your audience should be. I think it could be a good tool given the right circumstances.