Interactive Reading/Storytelling App for iPad

Ok, so this is going to be a little unorganized, because I'm not entirely sure I totally understand this app yet & it's only available for iPad so I can't play with it. But I'm posting here because I think it's an interesting concept as far as writers go. But if the mods feel it would be better suited to Games, or Tech or something that's fine too.

Anyway, a friend sent me these links to an article about a new iPad app by the makers of Second Life.

Basically, it seems that the app is an interactive reading/creation game...thing? Players create the characters, or become the characters, and create the story, and then the finished story can be "published" for free or for pay? Like, crowd-sourced fiction? I think? (Apologies for the question marks, I'm having trouble wrapping my brain around the concept behind this thing).
From the article:

Importantly, Versu's stories require reading and electing options, but go well beyond the "choose your own adventure" model. players can choose among multiple characters to play as within the story, and non-player characters have an array of reactions and responses depending on the player's actions. It's interactive reading, but there's also a sense of engagement and agency.

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That Versu also wants to create an ecosystem for independent creators and storytellers is a major part of its story. "The back end for Versu is pretty robust," Humble says.

"There's a whole bunch of AI going on. The first tool will be a character creator, so you get to create characters with motives, and then put them in settings and play with them," he adds. "And then there'll be a scene and a plot toolset, and that will complete the circle. Then we allow you to upload them to our servers."

Players can sell their stories free or paid; in the latter case Linden takes a percentage in a fashion very similar to the user-generated content economy of Second Life.

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I'm not sure how I feel about this. On the one hand, I think this sounds like it could be a fun game/reading/experience/thing. On the other, as a writer, I don't think I would contribute any "serious" characters/storylines to it. I'm enough of a traditionalist that I want my stories and characters safely confined between the covers of a book, even if they're just electronic covers. And yet, this sounds like it is just another way to write electronic books in a collaborative way (I think?) sort of similar to what Neil Gaiman was doing recently with Twitter and the Calendar of Stories thing.

Sorry this got a bit away from me. Any thoughts, explanations, experiences, concerns...predictions of the end of publishing?
Is collaborative fiction the wave of the future, or just a novelty?