I used a similar system in Scrap Mechanic (only worse - it is based mainly on one-bit logic gates and you can't name them, only color them). It was an annoying way of 'programming', as it was really hard to organize the circuit so it wasn't utterly impossible to follow.
I think there would be some value to having a 3D space in which to arrange a system, especially a system that controls a 3D world, but small parts of the system are best edited in a 2D form that can be hidden, in an editor where things can be labeled and documented. Or better: abstractions - like a catalogue of circuits / state machines you can instantiate and re-use hierarchically, with implementation details hidden.