This really isn't different than having people being nominated by staff, because of the voting process. Basically everyone will be vetoed, and anyone that passes and becomes a moderator would have most likely been nominated anyways.
Just my two cents. Anyways I like this idea, but then again that's all I see it as right now an idea. I think community nominated moderators for probationary terms to see if they'd be able to do the work and later could move on to full time positions would have been better.