It is true and may be ute ultimate expression of super short tether AWE.
You could probably make a kite to fly up and down well (without resorting to making the kite a «bag»). Going down should make less/no power.
There is a slight issue with flying up/down, and I would rather go right/left. This is to deal with gravity. When going up, you can’t easily point the lift force upwards to compensate for gravity. Doing this will change the angle of attack. If you are flying left/right, this is just a matter of rolling slightly.
Second thought: is this better than a rotating rig with three kites? It takes a while to accellerate the kite for every cycle. With a rotating network the cycles could be longer for pumping, or continuous with drag mode power takeoff.