I can see a limited practical application of this. As Leon has pointed out it's difficult to see how this could be used to interfere with an unpredicatable shot. However, where the subject is fixed it would be easier to focus the system on that subject.
I'm thinking in particular of a museum/art gallery where there is a no flash photography rule. The system could be set up so that anybody using flash triggers the system which renders their photograph useless (well, covered with some other message/image or whited out).
Of course, the obvious downside is that the very reason museums/galleries claim to need a no-flash rule is because of the damage flash photography causes. Using the system would make it worse because the system would also flash in response to a camera flesh - inflicting twice the damage.
However, in my view many attrations ban flash photography and tripods not because they are worried about the damage caused but because it's an effective way of ensuring that they have the monopoly on postcards, books etc. Not so much because they don't want the average visitor to take photos but because they don't want a third party coming in and taking photos which they can then sell in competition with the venue's cards/books. I can see how using this system would be an effective policing mechanism.