I think this is a good idea. Often I give up reading before the end of a book because I lost my interest. According to the comments I find on Internet, many do that. A lot of books are just boring and don´t come up to the expectation. You never know what you will get when you buy a book. But neither authors nor publishers care. Tyler Cowen quotes an "old publishing-industry cliche that it doesn’t matter how many people read your book, only how many buy it."
Paying authors by pages would just be fair. Then authors & publisher have to care if the book is read or not. Maybe they would focus more on the quality to keep the buyers reading. I believe that the new payment model creates an incentive to write & publish better books.
Maybe Amazon will extend the reform and will charge the readers also by the pages they read. This could encourage to buy more books because the risk to waste money on a disappointing book would be considerably reduced. Lower risk, lower prices (for books not read to the end) & a higher average quality should raise the number of books sold - and also the incomes of good writers. This could lead to an Darwinian selection process.
Maybe the new Amazon model will be be a boost for book reading & publishing. And book buyers would become readers.