This might work for the middle distance events, but for the sprints and long distance events it could be very annoying.
- I assume you'd need banked tracks for the sprints, which might mean no lanes (is that what happens in indoor meets now? There aren't any indoor meets in my country). Sprinters already have to lean into the bends on a 400m track, so it'd be twice as necessary if the track was half as long - that probably makes for slower races.
- For events beyond about 5000m you're going to have heaps of people getting lapped. That's inconvenient for the leaders, and can be confusing for those watching.