I had some "reverse classroom" classes back in college, and it was the best kind of class for me. Read the papers on your own time before class, and spend class discussing and in tests.

It did, however, absolutely require everyone to prepare for every class. Some people complained a lot about this, which might be why this was not as popular as more common lectures.

I worry the sort of core classes that are in massive lecture halls (and everyone remembers hating) would be more of a "blind leading the blind" situation if run like this. Maybe not with lavish funding and small classes. I had a couple classes like you describe, but they were on specific topics I was very interested in near the end of my undergrad program.