This is actually something that's crossed my mind on a few occasions. I think such a system could be useful to the open source community and the indie gaming community as well.
I like the idea to use color codes, since color is a somewhat universal attribute, but I don't think that using age numbers is a good choice. I've always thought that marking the 'rating' of a game by recommended age was a bit unrealistic because I believe age is a very fuzzy way of determining a person's general level of maturity (with regard to the sorts of media they can consume without feeling dirty or repulsed, that is). If something like this were to exist, I think it would be best to use symbols and colors, to avoid the aforementioned age problem, and to allow the system to be used across different languages without an urgent need for any translation (you wouldn't need one graphic that has a red M and then a hundred other graphics with characters from different languages); any person regardless of nationality can look at, say, a gun and a beer bottle on a red background and at least get a vague impression of what the image is trying to convey.
What I think could be done with this system is to have a group of... things. Violence, sex, drugs, and language. And then you'd also have green, yellow, and red. The four things can be put on a background with the game's color rating. Color rating is determined by which of those four things a game has. If it has any ONE (in a certain amount, so if Mario says "ah damn!" once in the whole game, it doesn't set the Language mark), it's green. Two, it's yellow. Three, it's red. If it has none, it's green with a special symbol like a flower or a baby head or something. If it has all four, it's red with a special symbol like... I dunno, a shock gif from /b/ or something.
That allows a game's 'rating' to be easily communicated by just saying the color (or "very green" or "very red" or whatever), and allows the reason for the rating to be communicated with easily understood, language independent symbols.
Another thing I think would be important is for the ability for a developer to determine the rating of his own game, without the need to have it checked by a third party. There needs to be an at least mostly standardized way to figure out if your game trips the Violence mark or not. It would probably correct itself, or at least bury false ratings, by people just calling the developer a dumbass for thinking "Random Killing Three: Mother Noose's Nursery Crimes" doesn't contain Violence.
And if any system like this ever does come into existence, the biggest roadblock would be getting enough into the mainstream for an average kid's parents to be aware of them. You'd probably need to make some sort of deal with a well-known organization like Google (best-case) or Mozilla or someone to get enough screen-time to be noticed by more than a couple random internet trolls.
You should go for it, though.
