I agree, chroot + setuid is one of the most successful models out there -- assuming you're measuring success by popularity. If you factor in effectiveness, on the other hand, I was under the impression that it's a disaster.
setuid is good, but privilege escalation flaws are not that hard to come by. And once you have root privileges, chroot is no longer a security mechanism, it's just a convenient filesystem remapping trick. Nothing prevents you from creating your own special device and mounting the entire filesystem within your chroot jail. And that's only one of many, many ways to escape chroot.