I like the idea, could pave the way for collaborative games. The only issue for me is that I have time constraints, and bandwidth issues. What’s a small file for most people might be too large for me to download, assuming i was going to compile it together.
But having said that, lets do it. Should there be a standard song length? I think it should be limited to 1 song per person, and to remind people not to worry if they don't think they're any good at music. That way people wont stress and try too hard. The biggest killer of creativity is false standards.