If you accept the god of the Bible he is not a very live and let live type of guy, if you start watering down and re-interpreting that god as you please, as Knitter seems to be doing, then you end up with a buffet style religion that is so vague as to be meaningless. So, on both counts I do not see the point.
I don't think Knitter is the first to reinterpret the god of the Bible. The god of the Bible is not a static character at all due to the continual development (understanding?) of that god's character as the different books of the Bible were written. Jack Miles' biography makes that pretty evident, I think. So, re-interpretation of that god goes back to the foundations of biblical religion itself.
Such is the nature of theology.
Knitter forces some really square pegs into round holes with his forced chapter style of taking a teaching from the one tradition and then "going over" and applying it to the other tradition.
Of course, Knitter takes many of his cues from Thich Nhat Hahn. So, this isn't simply a case of a Christian trying to procure Eastern methods since even Buddhist masters have attempted to realize the internal harmony between theistic and non-theistic religion.
We must not confuse acceptance, tolerance and religious freedom with a mix-and-match do-it-yourself religion.
True, as this could lead to moral relativism and sustain a confused, dissolute lifestyle. However, I don't see Knitter as crafting a DIY religion as much as I see him utilizing the methods and vernacular of Buddhism to better understand "God." He doesn't always succeed, but he does make some valid points which even the most conservative Christian would have to concede.