Not only is it practical but it has side benefits also. More skills at 100 = more HP. So it forces PVPers or hunters to have the feeling of the need to max every skill. Which is a major reason not to have this system. It does take a good while to level every skill to 100.

Is the game really enjoyable when limited? Well currently (and always) there is no limit.
Having said that, many games limit your crafting and combat skills to a few choices. I do not think enjoyment is linked to limiting or unlimited skills. I think the link of limited or unlimited skills is how is the game set up? How is the economy, how is the crafting, how is the resource gathering, what type of trade system they have etc.

Personally, I think limiting the # of skills would allow people to either focus and be great at a couple of things, or be a jack of all trades and do what they like just not the best at it. Which is what Xsyon said his system was meant to be like, just it's not like that in game.