Remember back to your childhood when you played “House,” “Cops and Robbers,” (and perhaps even “Doctor”) with your friends. There were no Character Points, no rules, no dice, and no character sheets at that time. All that mattered was the role-playing. Capturing the essence of those games you played long ago should be your ultimate goal: just role-playing, and nothing else.
There follows sections on how to "Remove the Skills," "Remove the Attribute Levels," "Remove the Dice and Rules," and even "Remove the Game Master." I don't object to any of that in principle, and it could work quite well given the right group of players. I think that's pretty much how those Murder Mystery dinner parties work. The problem is that the role players I'm used to tend to be power gamers and they would not fit well with that approach. MacKinnon recognized that himself sever pages earlier in the section on "Power Abuse" (pg. 86).
The player characters may have tremendous powers. Perhaps they can literally
move mountains, or change the course of history. Sooner or later, someone will
decide to see just how far he or she can go with their character’s powers.
The solution he suggests is GM veto. But if you've done away with the GM then what? If you've thrown out the rules and a player says "I jump to the moon and pick up the alien death ray I find there," who's going to contradict them?
So while I think it's quite possible to have a fun game with no rules and no GM, I think it takes a very particular group of gamers to make it work. The average munchkin is incompatible with that style of play.
But I admit I'm a bit biased. I'm something of a gearhead and I enjoy games like Mekton Z or Hero System where you design your character or mecha for optimal awesomeness. So maybe my fondness for a design system that can be tweaked is skewing my view. Have you ever run a game with no rules or even no GM? How well did it work?