Also if you've actually studied up your history, you would know that North America's ESRB system does have an AO rating since 1994 and it does give it out to games deserving it since then.
Here's an example of a game that was branded AO:
Link
So not only does a system described in the opening post exist, it has been proven for several years that it does not have this apocalyptic effect of destroying the freedom of expression in video games. I'm not sure where people get this idea from.
Jack Thompson does not campaign for something like this (he lives in a nation where a system like that already exists). He wants something akin to the Comics Code Authority which would severely limit what could be done to earn a stamp of approval (and this is an entirely different beast).
[Edited by Neo7, 3/26/2015 12:51:10 AM]
Thankfully Jack Thompson was disbarred and isn't practicing law anymore.
I too am grateful that Jack Thompson is no longer practicing. Toki, I also think that an Adults Only rating is a good thing. But it will only work if there is effective enforcement and if PARENTS actually know the ratings and use them as they are intended.
I can't speak for the UK, but in the US the main problem is not the rating system, but a lack of education about what the ratings are and mean. For example, if you ask a person what does the movie PG-13 mean, they can give you an answer. On the other hand, if you ask them what and "M" means for a game rating, you would get a blank look.
It's more of a lack of enforcement. Both the MPAA and ESRB rating systems are not legally enforced. They are voluntarily enforced at the store level and usually these restrictions come with it (I think most stores have similar policies for Rated R and NC-17 media respectively)
M-Rated: You get carded when buying (refused if under 17). Parent allowed to buy for child.
AO-Rated: Nearly all stores will refuse to sell them. Must be 18 years to buy and will be carded. Parent not allow to buy for a child.
Even then, it's up to the person running the cashier to enforce it. Most retail stores care more for profits than they do for their policy and will only make a big stink if not following policy nets them bad PR.