What becomes possible? The entire internet could effectively get rid of hosting account providers, with each page in every site being contained in a hashify URL, and with each page linking to other pages using other hashify URLs. Trouble is, there might be a DNS-like system needed to match hashify URLs to more human-readable strings (or a way for existing DNS to resolve to hashify style URLs). Neat idea.
The real trouble is that when you link to a hashified URL, you are actually embedding in your web page (an encoding of) the content of the page you are linking to. Think matryoshka.
Right. Even without link cycles, any link would have to contain (nearly) the whole internet.