What's the potential fallout if this process is carried out to its fullest extent?
chaos.
Although I would love to see this happen in CA, it would create havoc if adopted nation wide and would ensure a handful of cities like LA, NY, Philly, and Chicago with a few others thrown in would elect the president...
Even the bluest states would contribute electors to the Republican candidate. The only places that Rats would benefit is in the largest cities in the red states.
Swing states might not be 'swing', however. We can expect them to oppose this. I personally like the idea. It would be much more representative of the way the country feels about a Presidential candidate. It actually gives third party candidates a chance at being a large footnote in history, rather than a small one.
It would be fun to see if someone could take voting results from the past several elections, and see what the electoral vote totals would be.