This would solve the long time issue of old maps not getting everything in an update.
It's really disheartening when you spend months/years on a map only to be left behind whenever updates are released. This was remedied temporarily witht the introduction of extending your world when transferring from 360 to One, but now with the next big update on the horizon, the problem has reared it's ugly, disappointing head again.
I understand that anything built outside the original map size would be erased, but like resetting the nether, it's a sacrifice i'm sure many would be willing to make. I also understand that this has a possibility of being abused for resources - unlimited diamonds etc. but that wouldn't be an issue if it was only allowable once per update.
After working on the same map ever since the 360 version was originally released, the ability to extend my map and receive what I was missing out on for a year and half was like christmas times 5. Now with the next big update on the horizon i'm losing all drive to lay the game all over again.
Surely they could (easily) let you just select a map to erase of a 5 x 5 grid (maybe via a villager? for, like, 50 emeralds?). I'd be on board with your idea, but I'm building Mos Eisley two maps East of my main map and my End Portal is one map to the North (which I've built a lot of cool stuff around). Oh, and I've built roads to all of my villages. Which is the whole reason my entire world is explored (to find all of my villages). 1,000+ hours, too. Starting a new save isn't really an option.
I like the concept. I'd definitely be willing to sacrifice a portion of the map to regenerate it and be able to take advantage of any updates that impact world generation. I know some may think resources are unlimited, but it isn't that big of a deal since you still have to find and mine them.
Personally I figure the best way is to select a map and be able to regenerate that map. Right now we have 25 maps. Select one and regenerate. That way people can select a non critical portion.