This is, in some ways, not the best storage system for energy, because it would need a lot of space, and at least occasional maintenance (because anythign less pure than drinking water is eventually going to clog things, and using drinking water for something like this would be a waste). On the other hand it doesn't involve any of the nasty heavy metals that more traditional batteries do, or the excess heat and pollution problems that go along with combustion.
I'm wondering whether a system like this could work on a small scale, and whether it would make sense to hybridise it with other renewable energy sources. For example, having a wind-powered pump, a bicycle-powered pump, a solar-powered pump and also using rainwater to fill a reservoir would give a lot of flexbility for 'charging' the system; even on dark, windless, dry nights it would be possible to cycle until you have about as much power as you need.
-should be possible to make all electricity-drawing appliances plug into the same system, which means less fucking about generally
-multiple options for charging the system reduces dependence on one or two resources
-ideally I'd want to have some duplication of whatever is used to generate electricity from the stored water; having lots of different ways to get water into storage is great but not if one can't do anything with what is stored.
-evaporation problems? Would re-use the water, obviously, but eventually it would have to be topped up
-I have no idea how much space would be required to have enough power to run various appliances, but I suspect it's quite a bit. Running out of capacity would suck.
-really, really not portable, and setting it up requires a lot more engineering than running similar systems on a stand-alone basis.
I guess something like that could work for a larger-scale development as well, small power stations with wind and solar and other generation facilities. Combine it with a gym and people could cycle or pedal to increase available power...