I like the idea in theory, but I think it would fall apart pretty quickly in real life and be a disaster.
The players (and agents) would have a field day with this thing, they'd pretty much have total control. The teams would be at the mercy of the players from Day 1.
Hmmm, Minnesota has the top pick this year, and the Lakers the year after that? Maybe I'll stay in school one more year.
While maybe it wouldn't happen that often, I think it wouldn't take long for one where a potential transcendent superstar, a sure fire #1 pick decides to go back to school (or play overseas) to avoid being drafted by a certain team and/or to be able to be drafted by the team of their choice.
Now players go pro as soon as possible because 99% of the time they're going to be drafted by a terrible team anyways and they only have a vague idea of who will be drafting around where they're slated to be picked, there's really no way to game that system from a rookies perspective. But now you're telling me if I hold out a year I can go to an instant contender or one of the premier cities? Or I know years in advance who will be drafting in my projected range? This system would be gamed pretty quickly I think, possibly as early as Junior High/High School (think of players staying back, going to prep school, sitting out an extra season to recover from an injury, etc.).
I don't think players would hold out more than a year, and not every player would do this, but it would happen enough to be a problem I think.