With sufficient notice, this is a good policy and no doubt will relieve some of the trouble for front-line staff to take care of rebooking for the knowledgeable traveller. This gives options to those who can access the internet or the airport kiosk.

I do not see how it replace OMW. The one and only time I bought OMW was for a winter flight from LGA-YYZ. By the time I checked in, the agent told me that the flight was cancelled and I was rebooked on the next flight (the next morning). The OMW coverage was different, as it gave options for flights on competitors (though weather probs usually negate this option), hotels and food for extended delays.