These rules are easily, and fairly, criticised on a number of grounds. Foremost among these criticisms is the rules' arbitrariness, encompassed in the notion that "the number of points given a player for a game session is a signal of how well the DM thinks the player did in the game". In other words, they're a method for rewarding whatever the individual DM's conception of "good role playing" entails. Favouritism, inconsistency, mistakes, unfairness, resentment - what could possibly go wrong? The worst element of all this is the idea that experience points should be awarded for meta concerns such as whether a player got involved properly, encouraged others, interfered too much, or acted like a "rules lawyer". Why it is the DM's business to passive-aggressively police the behaviour of the players through XP awards rather than just taking them to one side and saying, "Stop being an arsehole" is beyond me. Almost as bad is the idea of getting XP for achieving "story goals" - a rule that positively incentivises the absolute worst thing about bad gaming: railroading.
The beauty of XP for treasure is not just that it is simple but that it also tells you what "good role playing" is - getting treasure and surviving. It is what Ron Edwards might have called "coherent". This might not be to all tastes, but those other tastes are served by other games.
The 2nd edition way of awarding experience points was always unworkable in practice except in limited circumstances (like an adult DM with a group of youngish children), and it is mostly a historical curiosity now - or at least it should be. But it's possible that there is one bit worth rescuing. This is the class awards. Briefly summarised, these are:
- Fighters get XP for "defeating" enemies
- Priests get XP for successfully using their powers, casting spells to further their ethos, and making stuff
- Wizards get XP for casting spells to overcome "foes or problems", researching things and making stuff
- Rogues get XP for using their special abilities and, er, treasure
This is at least worth playing around with as the sole method of awarding XP where the desire is to get away from the "PCs as rogues" motif that is at the heart of what the OSR is all about. It is coherent in a different way, in that it at least attempts to link XP with what the various classes are supposed to be for.
The immediate consequence that suggests itself is that this would incentivise slavish and unthinking pursuit of what you might call class priorities: the fighter wants to kill everything; the magic-user is constantly trying to come up with magical solutions to solve problems; the thief is just after treasure. This could have its charms. One could imagine all sorts of amusing and interesting consequences flowing from having an adventuring party whose priorities are fundamentally orthogonal and occasionally even directly at odds with each other. Although one could also imagine priorities being so different that it becomes difficult to reconcile them.
Another is the mid-game. In my experience as the players begin to amass cash they tend to use it to make investments (in 99% of cases this is building a pub; in 1% it is fortifications). If most PCs don't have a massive interesting in getting treasure in order to advance, are they going to be as wealthy as they go up in levels? What does a fighter do whose only real goal is to fight? Or a wizard whose only real goal is to use magic and research it? The answer: much more adventuring, but for other aims than financial.
How this would work in practice remains to be seen: as usual, have at it in the comments.