issues:
(i'm missing the recurse to children checkbox - it would be on the bottom)

keeps the same concepts in place - public, semi-public, private. solves most uses cases we've seen forums (view + editor differentiation), relatively compact ui. keeps the end-user from having to understand roles and permissions. tab names may not be clear enough.
not a true generic implementation - will not solve more specific granular use cases, like "attach but not edit". will not fix issues if somebody custom posts permissions. tabs might be confusing. if admin changes the values of contributor or viewer, could be problematic. removes <select> form, so we'll have to write our custom control for the user list.