This thread at Play Diplomacy points to the main problems:
You're going to need redundancy
You're likely to need to leave units behind your desired front lines to serve as tripwires.
The early game is just going to be a crapshoot as aggressive players either shoot ahead through lucky coups or get clobbered by walking into traps. You can either try to be one of the lucky agros or play defensively and hope you don't end up too far behind and look like a trustworthy partner for the survivors.
You're going to lean heavily on your friends
Assuming you're working with someone to maintain short and mostly offensive lines, you're going to need to depend on them not coming around behind.
It'll also be possible to pull your allies off balance by claiming attacks that don't really exist, exposing their position to yourself or your 'real' ally.
It's also rather unrealistic
As fun as it is to strengthen the importance of diplomacy, it is rather silly that you wouldn't be able to get any reports from anyone of actions within your own territory, units or not.
It's only really possible online
It would be difficult to partition the board to do that last bit; it'd be impossible to play your 'trojan' game on an actual board.
Given the importance of lies and backstabbing in this version of the game, you'd probably only want to play with people online, lest it negatively affect your real-life relationships.