Interesting offense. I'm not going to talk about implementation, because I'm an armchair general, not a coach. Execution is what makes professionals great, and is boring as all hell to amateurs.
It seems to be almost exactly a cpj flexbone operated back a bit. I can see how the pistol would be a huge help on highschool offenses (heh... using in context) where the learning curve for the bback and qb under center would be painfully steep.
As for Georgia Tech using it, it seems like it diminishes the effectiveness of the bback, the keep, and the pitch in order to increase effectiveness on the short pass. The bback loses the snap-grab-wham full tilt right at the beginning momentum because by the time he makes the additional two steps to the los the defense has time to build their own momentum way more than they can now. The keep similarly loses the 'oh **** where's the mesh' that confuses cameras and defenders all the time. Finally, the pitch diminishes in effectiveness because it depends on displacing the ball to the outside when the other team has momentum towards the interior (i.e. where the qb is). Place that backwards a few steps and it suddenly becomes easier not only to get a defender over, but it becomes much less likely to find a seam where the defenders lack an angle to close and then you gain 30 yards.
Now, offsetting this you have an increase in the effectiveness of the short pass because the qb can catch and find a receiver, instead of mesh-fake(or look for a run)/drop back-find a receiver. The effect on long bomb type plays is minimal, because of the timing of the throws.
So: Two questions
1. What does GT gain from the pistol?
With this set of athletes, fairly little. I can't think of any games last season where the ground game was being shut down effectively and a short route would exploit the defense's alignment or commitment. Those situations exist, and as others have pointed out there are pistol formations in CPJ's playbook for those times. I would not be shocked to see something rather like this used situationally when, for example, the dive and keep are being shut down and the counter or midline aren't shaking the defense out of it.
So I think this is potentially something we will see, if the right opponent ever materializes. But as a general look? It has downsides on our 3 best moves to increase the effectiveness of our fourth best move.
2. What does the opposing defense see?
The defense certainly has less incentive to use the VT 'oh **** ALL THE RUSH, ALL THE TIME. IN FACT, TIME THE SNAP' But a reliance on this formation is, I would think, going to get clobbered by a Foster defense. Why? The teeth of the offense are just not as sharp. With a good head of steam when they find the b-back, the defensive line has critical time to align themselves and plug the holes. Heck, with the athleticism and vision you see in the best opponents, the second level can probably stop a gain for very much even if you have GT's patented Defensive Rollerskates (TM) on your line.
The keeper likewise sacrifices not only distance, but, critically, angle. JT may be interning at Boeing's advanced transonic aerodynamics lab (where he's examining the lift created by being so smoove) but he can't overcome that much disadvantage and still come up with 15 yards out of nowhere.
So, if I'm VT or Auburn or (shudder) Ugh-uh, I'd cover the WR and A's, and dare CPJ to come up with three yards and a cloud of dust out of the pistol. I think highest quality defenses can just overpower it.
Final thought:
That's why CPJ's offense is so pretty to me- it balances very carefully a bunch of moving parts to extract the most advantage it can. If we didn't get momentum here, or angle there, the whole thing would come apart. And if there's anything more appropriate for an Institute of Technology, well, I can't think of it. I mean, come on, we just described the birth of engineering - if this moment or that angle weren't just right, the whole bridge/arch/dome would come crashing down. Then we'd have to build our buildings from big piles of steel, and put center columns on our arches.