The problem is this may not fit in with European degree equivalence issues.
A couple of years ago, there was quite a discussion about this as Italy would not recognise UK 3-year first (Bachelor) degrees awarded after a certain date - and I can not remember the qualifying year - as being equivalent to Italian first degrees which take four years to complete.
This is important as people with a degree are entitled to higher salary scales than those with a diploma.
As an example, I did a short consultancy with an Italian for an Italian group. His highest educational qualification was a diploma, mine is a 4-year UK modern-languages degree. Even though I was his subordinate, because I held a degree, my remuneration rate had to be higher than his.
The article claims it will effect research, but I don't think this is the case. It just means undergraduates will have more teaching from postgraduates, which will effect the quality of their education.
Also, what about the benefits of a university eduction, that are not just from studying. From that I mean, the skills that are developed by running a sports club, student society, or taking a position in the students union? It would even limit students from taking up summer internships, placements etc.
These activities provide students with valuable experience that isn't available from studying alone - for example, in my job applications, I used to talk about the skills I developed whilst working as a Students' Union Executive more than my time in the mob. If a new timetable doesn't allow students to take part in these activities, I can see a general decrease in the quality of graduates.