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This idea is not new. In Italy this type of construction is called "malta in paglia" and was traditionally used in low cost, self-construction since the Middle Age . It has many drawbacks.
a) The walls cannot carry weight since their compression resistance is just 19 kN/m2 (1/100 of a light cement). So they can just serve as divisions.
b) It is well known that cellulose in contact with alkaline substances like lime hydrolyse into sugars, loosing its mechanical properties. This effect was researched in China with bamboo fibers used to reinforce concrete. So the durability of the straw bale wall will be less than 10 years, and much less in moist climates.
c) It is not an accident that the ancient Italians mixed the straw with mud or clay and a very little amount of lime. Once hardened, lime was used to plaster the wall. This kind of wall never carried load, it was always placed inside wooden or stone bearing structures.