Might be limited, but would be a great system to, I'd love to be able to make my own music without an instrument or anything. But both ways won't hurt?
Perhaps to a programer that might seem like a really logical way to do music, but me being a music composer
I can tell you that it's not worth the effort or time for a few reasons.
1) This is the way music used to be put into games. If you crack any of the original nes files you'll see what I mean. It was time intense and not an easy way to write music.
2) This would be so limiting so as to not be worth it. Since the music would be played in real time, you'd either have to work off the existing midi wavetable (which sounds like crap) or include soundfonts/samples with the map.
If you are worried about size, it might be a good idea just to deal with ol' school trackers (which pretty much automated the system you are talking about anyway) and just include a player, which are really small. But to be honest, if you hope to have any kind of even reasonable sound, you'll need to use real music and since mp3's are so small in size it really doesn't matter. 5 years ago, adding 3-4 meg to a file size would make a difference. These days, however, it's just a tiny blip.
If you need music, have someone write it for you. I've heard enough programers music (and I have a number of programmer friends) to know that music isn't just a math game.