That feels like it's not aligned with the original idea of giving all children an investment account.
This is capitalism.
Social security can literally go on for centuries, just fine, as long as there is political will to keep it going.
Do you get to choose the portfolio provider? Can you move the account to a different provider? What obligations do the providers have regarding marketing, 3rd party access, etc? What types of investments are available? What funds are available? How much are their fees?
Anyone that has done the math has found that a lot of 529 plans have such bad choices and high fees that you are actually better off in a non-tax-advantaged Vanguard Total Market fund (note that Vanguard offers a good 529 plan).
It's an interesting idea, but it seems less likely to work and more likely to be a ponzi scheme or other type of scam than something like welfare reform, declaring basic food and housing a human right, then backing that with some reasonable policies. Most people might have to sell theirs to goto college or buy a car to drive to their first job I imagine. It's shivering with "K-shaped recovery" vibes.
At least, I'm confused about what problem it's attempting to solve here. Maybe it's not intended to solve a problem.
That said, sounds interesting. Gives kids a huge headstart for time in the market, builds financial literacy, provides broad inflows into the market pumping asset prices. Gives the next generation skin in the game.
If we accept the premise that market participation is a good thing, then this does seem to be, on balance, beneficial.