This isn't a bad idea. I've seen similiar things at drama subtitling sites. Granted that's a little different, but the way they have it set up is like so:
All text entries are in their own seperate windows. These windows are split in four parts: one for original content, one for rough translation, then a final translation, with the fourth window reserved for notes and discussion. Yes, that amounts to a lot of windows to handle all the text (a typical 1hr drama winds up in the thousands), but each snippet is very small.
Basically, you submit all translations like you would a wiki, except the display is more like the way history pages work.
When a translation is as good as it gets, that window gets locked, which incidentally limits the available text to just the final.
Obviously the moderator (usually the main editor) handles registering translators (or banning them), accepting changes, and locking good text.
Generally there's a page for reserved words and accepted name translations.
Anyway, it does work in other applications. Of course, scripts are only half the battle with ROM hacking, but that is half the battle.