I can see a downfall to that. Eventually, players will figure out a combination that will pigeon-hole them into a 'necessary' path in order to win. I think that factions should stick with their own traits and only be able to trade resources.
Perhaps an alternative would be to have faction affinities. The more you ally with other races, your affinity would increase with them until you get a certain point. After that, you can unlock research that gives sort of hybrid troops/items. Of course, building affinity would take a long time, and allying with opposing factions would lower affinity with another, so you can't get everything.
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