It's pretty much the basis of how scientific journals work in the real world and have for – damn, is it centuries now? Centuries, in the case of certain academic publications.
You can even mandate, if you have the manpower and time, two additional things that are very important:
3.5: If not approved, send a notice to the submitter with a list of issues, and allow them to submit up to two more times. If the piece is not up to the standards of submission after three tries, reject the piece – gently – but allow the submitter to post without the Utopian branding or rewards.
3.7: If after a week the submission still has not been moderated and accepted or rejected, allow the submitter to post via Utopian with the tag but without rewards.
(The latter is designed to provide an incentive for the Utopian side of things to press through submissions in a reasonable amount of time. The specific timeframe can be adjusted to suit, but it should be relatively short. If the moderators miss their window, the organization isn't out money but their reputation may take a hit if the piece is truly not up to their quality. That seems like a sufficient threat.)
But yes, overall – I think this is a far superior interface if you want to run a purely moderated organization which wants to both maintain a strong public reputation for quality and have incentives on both sides to follow the rules in a timely and intelligent manner.