It will work, provided that David (or whoever does this) assembles a group of respected individuals to "judge". It will also require that those individuals possess integrity, so that the process will not be compromised. It will require a fair and broad-ranged set of standards & criteria by which each item should be judged. Any judge found to be compromising the standards for compensation should be dismissed.
If these criteria are met, then this program will be successful. If they are not, then it will not succeed. You can carp and complain about how it might offend some people -- how do you think the non-winning directors at the Oscars feel? This should not be a great surprise to anyone, yes, feelings may be hurt, and no, you can't please everyone. The question is, which person is it more just to please?
You can't say that this is a highly variable subject. They're all scripts. You can classify the types of script by difficulty and genre, or whatever criteria you would like. This is much the same as a movie. You have drama and horror and so on, low-budget & high-budget, fan films and feature films. The similarities are striking. You can apply this model to any category of items, scripts not being the least of those.
Finally, I believe that David might want to run this in much the same way as the "Academy" -- the members of the judges are secret, and not even known to each other, let alone the general public.