That joint was actually an idea Hasbro bogarted from 21st Century Toys. The initial waves of World War II 1:18 figures (German Infantry and U.S. infantry) utilized that very articulation in the knees and elbows of its figures.
My opinion of it is low though... Even 21st wound up goiong with new hinges and swivels in its figures because the joint allowed for 2 positions that looked natural, but nothing in between.
For instance, a soldier can sit/kneel or stand, but walking poses and such looked awkward at best...
21st opted for a hinge at the knee that was sunk into the upper thigh instead of the typical pin joints Hasbro was using.
My take on articulation is that Hasbro's made the biggest leap in articuation in scales under 1:6 by doing large #'s of ball/socket joints.
It looks better than any joint I can think of (if executed properly), and to boot it gives the widest array of positions for a single joint. It's relatively simple to create as well, and in theory the pins used for these joints could be created only a couple of times and reused repeatedly on other figures which would employ similar articulation styles. This would eliminate some cost for the increase in articulation.
The first SW figure to employ that joint style was of course the Rebel Fleet Trooper from POTJ, but a couple figures have had similar styles since. The Maul Sith Lord from Saga, Sae See Tinn from Clone Wars line, etc...
I don't think it's a terrible articulation idea, and it is generally an improvement. It even looks real good on the Fleet Trooper since it resembles a fold in the fabric. I don't think it should be the standard though, since ball/sockets are really the evolution of articulation on figures, can look seamless to the sculpt, and can acheive massive movement on a small-scale figure for a reasonable cost.