Oh, wow. You might call this an example of the “metaphor anti-pattern,” where they re-create a physical something in digital form and thereby replicate all its weaknesses; plus, since you can’t truly replicate everything you introduce new weaknesses. In this case for example, users can’t fan through multiple pages to skim to what they want. The result is you’re creating advanced technology to make something that is less usable than the original technology it replaces. Alan Cooper and Robert Reimann describe this blooper in Chapter 20 of About Face 2.0 (pg252).
The idea is apparently to use a magazine metaphor so users will know how to interact with it. Users know how to flip pages in a magazine, so they’ll know how to flip pages in this digital replica. Theoretically, this would be good for someone who is totally unfamiliar with computers. However, if they have to get to this document by going through conventional web pages, then they must already know how to click and scroll, so they’re getting no benefit from the capacity to flip pages like a magazine. Maybe if the computer is booted with this UI already loaded, they might benefit from it….
Or maybe not, since it isn’t quite the same as magazine. The mouse provides no tactile feedback, so “flipping” is slower, clumsier, and more error prone. The fact that the designers had to put redundant buttons to turn pages is a pretty good clue that page flipping is not intuitive and/or kind of a pain. And if users understand GUI buttons, then they’re not going to benefit from knowing how to flip magazine pages.
That’s about all I can say on the “pro” side. With some work you can make it as good as viewing a PDF in Acrobat Reader, mostly be replicating most of the features that are in Reader. The main ones I see missing from your example are a scroll bar or equivalent (e.g,. fanning) to quickly get to arbitrary content, and bookmarks to quickly get to major content breaks. Add those, it’ll be about as good as Reader, once users learn it (I keep forgetting there’s no “dead space” on the page to cancel an action and thus accidentally turn pages or zoom in/out). Or save yourself and your users the trouble and just rely on Reader, which is probably installed on as many computers as Flash. So I agree, I don't see any advantages over Reader for any reasonably likely scenario. It's more likely to require more learning and be harder to use. And, yes, it's gimmicky too.
Of course, the content really should be in conventional web pages. That’s what HTML was invented for. This magazine metaphor is notably inferior to conventional web pages. Off the top of my head (many of these apply to PDFs too):
You have to zoom in and out to read the content, in addition to flipping pages.
Lots of panning around, both horizontally and vertically. By replicating a printed document's multiple columns the user may have to pan down, then up and over and down again to read a single page. In conventional web pages, the user only scrolls down.
No in-line hyperlinks to jump directly to topics of interest.
Content is broken up arbitrarily into pages due to replicating the physical limits of a paper page (conventional web pages break content into meaningful chunks).
Unpredictable Back button operation. In the example implementation, the users can quickly "bury" their histories, making it difficult to return to the place where they got the document.
Inability to bookmark/favorite individual pages.
Accessibility concerns.
Slow downloads.
Possible compatibility issues with privacy settings, plug-ins , the browser, or OS. iPad anyone?