No, it's not a cool idea. I had no idea... This is a MMO mechanic that doesn't belong in a single player game. MMO's use it to keep you grinding for rare items for your guild, instead of burning through content on hand-me-downs. If you've got a party of 6 different classes in a single player game, at most one melee hands down to another, and for a very limited time too. If this is truly like what happens in MMO's, it's just nonsensical.
Edit: Don't misunderstand my statement. I'm not saying that because I can't do something I want to. I haven't even started the expansion yet. What I am saying is that it's like this...
In an MMO, say a top raid item drops for a warrior and you have 3 good warriors in the guild. Of course they all want it, which is why systems like DKP are put into place. And those warriors have to make a hard choice about whether to use their points or save them in case something else good drops later in the raid.
In a single player game, if the same thing happens and I have two fighters in the party... It's not a big deal. I just give it to the least well equipped one and wait for something else to drop. After all, I control both of them and it's no skin off my nose. See? There is no "hard choice", and that makes it a meaningless mechanic to the player. Personally, I won't lose any sleep over it. Except maybe, why didn't they put that effort into some other feature?
I'd compare it more to disgaea than an MMO... you literally level up an item and can severe the soul binding whenever you want. It's fine, it just works less well in a game where there's limited enemies.