It sure sounds like a very interesting idea. But the examples on its webpage are a bit underwhelming -- the basic (unspinned) narrative is string of unrelated this-happened sentences. That's not a story I would like to read (or play). So either the software needs some way to go yet, or a seasoned IF author writes a better example (maybe hold a Comp?). I really wish one or both things would happen, the potential is there, let's see how far it can go without bumping into the AI wall.
A simple (I guess) but effective improvement would be to use pronouns instead of always repeating e.g. "the twitchy man". Synonyms would also be a boon. There's only one guard in this story, no need to call him "burly guard" after the first time.
Supporting other languages less regular than English will also be a challenge.
As a (big, sorry!) aside, I hate Inform 7's syntax. It replaces the familiar trappings of a programming language with english words, ostensibly to make it more palatable to authors which fear programming. Reminds me of COBOL (and, to a lesser degree, BASIC), an attempt to make programming more approachable to non-mathematicians, especially business people. I don't think replacing <a := b> by <move b to a> resulted in more people suddenly picking up programming. I b> guess replacing <Man colonel "Colon Mustard" billards_room> by <Colonel b> Mustard is a man in the Dining Room> will neither. Both English-like b> snippets read naturally, but writing them is still a strict art. You cannot b> tell COBOL to <set b equal to a> nor can you write <Also in the Dining Room b> is the male Colonel Mustard> in Inform 7.