Most elections are not like the next presidential election. In most elections, there is a prohibitive favorite in at least one party, usually the President running for a second term, or the incumbent Vice President.

Giving everyone $25 allows some of the members of the "we already have our candidate" party to spend their money supporting the most untenable candidate to weaken the opposing side. If this scheme were in place in 2004, lots of Republicans could have given to Nader or perhaps Sharpton.

While I'm sure this would make for entertaining election seasons, I doubt it is the best way to pick the best candidates.