Don't you then run into problems some factions having better models than others at various point brackets? For instance Arcanists have Fire and Ice gamins at 4 (and Steampunk Arachnid at 3), which doesn't seem to be an even -up to what the Guild could bring (as an example).
I think you could do something like that, but then I'd rather give every faction a generic minion that was the base of your force, and then you could "earn" access to the more advanced unit we usually use.
Going generic is also the best/only way I see an experience point system working too. At least if you want charts etc. If you wanted to you could sit down and agree on when a given model advanced and what it should get, a more "narrative" approach you might say.
To be honest, the only experience point system I've felt worked was the Blood Bowl one. Every other system I've tried had some serious balance issues (Blood Bowl sort of avoids that with the inducement system), I've not tried the new Infinity system yet, but from looking at it I think the best balancing item in it is that it doesn't apply to very much.
Still, for some fun in a gaming group I think its a great idea. A small group of likeminded players, a cooperative approach and you should be good to go. Just don't make it to system oriented.