This is an interesting idea, I'm assuming it can be done though don't really know enough about the API technicalities.
However if I'm stopped from including @NAME in my tweets can I still share their tweets as a link? Currently these autoembed and display as 'This tweet is unavailable' if they've (a) deleted the tweet or (b) blocked me. By that I mean copying and pasting their tweet as http://twitter.com/NAME/alphanumeric0000
Also if I can't type their @NAME I can still type NAME. Even if it's not a clickable link it's sufficiently informative for someone else to retweet my unclickable "hey pile on to NAME" tweet and comment that "their handle is @NAME by the way" so I'm not sure how much of a barrier it would be. Plus anyone can search NAME to bring up a clickable version too.
I did want to highlight one aspect about blocking though, which is "...except the offender is also prevented from seeing your Tweets while they're logged in".
That isn't true. All third party Twitter apps that I've tested (using a spare account on which I've blocked myself!) including Echofon, Janetter and Osfoora on iPhone and Tweetdeck on desktop (others have told me it's the same with Fenix for Android) show all tweets AND profiles of anyone that's blocked you. Official Twitter apps (Twitter for iPhone, Android and desktop twitter.com) won't show profiles (instead displaying the 'you're blocked' note) but searching for tweets SENT to the blocker lets you click on any reply and see the full conversation unfold (including the tweets from the person that's blocked you) thanks to threaded conversations.
In short blocking does absolutely nothing to stop anyone from seeing anyone else's tweets, whether or not logged in, if the account doing the blocking is public. Of course people can toggle between different accounts on phone apps and Tweetdeck and they can log out as well.
I wish Twitter made this a little clearer to users.