This is very similar to the hashing trick used in vowpal wabbit (http://hunch.net/~vw/). I haven't used this python module, but vw is absolutely incredible to use.
Great point! VW was actually an inspiration for this blog post. I don't believe it handles structured data quite the same way as hashkernel, but it does a great job of accepting both categorical and continuous features. We use VW models to classify all sorts of badness on my team at Facebook (http://www.newscientist.com/article/dn21095-inside-facebooks...).
