It's certainly a step forward in terms of realism, but not all games need realism. I do actually quite like it, but I don't think it'll catch on. Simply for the sake of user-friendliness, games will keep having HUDs, especially FPSes where you need to keep track of health, ammo, a compass/radar, etc. Plus, in some games, Halo for instance, having an HUD makes perfect sense in the context, as it's the readout given by the viewscreen of the helmet.
I have, however, played one game which handled the "no HUD" issue very well: King Kong. Not necessarily a great game overall, although the shooting sections were very fun. In this regard, it's one of the more realisic FPSes I've played. Ok, you have regenerating health, but there was no HUD at all: no ammo counter, no health, no compass; nothing. As you took more damage the screen would get progressively darker red, and that was the closest it got to having any on-screen information. Aiming was done, like in hardcore CoD4, by using your gun's sights; you could fire from the hip, but it was inaccurate, and you could never really be sure what you would hit, just like it would be in real life. Possibly the one weakness was the way you found out how much ammo you had left; you pressed a button and you'd get a voice clip of your character telling you how many magazines/rounds you had. Arguably the weak point, but I don't see how else they would have done it.
King Kong wasn't necessarily as much fun or as well put together as CoD4, but the fact that there was no HUD at all, and the fact that that aspect of the game was so well done, definitely made it one of the more unique and memorable FPSes I've played.