The single biggest problem seems to be that the adhesive phosphorescent strip is attached to the rim, which on most bikes is what the brake blocks press against to stop the bike. If you look closely in the video, his bike has no brakes !!! (You even see him use his feet to stop.) So much for "saving lives"! Disc brakes would overcome this, but that's going to be an expensive retrofit for most cyclists.
As it's a cruiser the more likely explanation is that it's equipped with a rear coaster brake. Not sure why he's not running anything up front, however.
So, yes, for those few bikes that don't have conventional brakes, this lighting system may be an option.
That doesn't change the fact that this product will be useless to the majority of people who might purchase (sorry, sponsor :-) it through KickStarter, at least without sacrificing the ability to stop.
The fact that this isn't called out in the video or text is deceptive. There's no way he isn't aware of this serious shortcoming.