The problem is that leaves every dev in the position of not making any money whatsoever from itch.
It also results in the site being shut down within a couple months, because there's no way in hell they have the funds to actually maintain the servers and whatnot for terribly long without an actual cash flow.
No it doesn't. It means stopping all purchases on the site until you set up your own payment processor. No games would be removed. Unless you mean people who don't already own them not being able to buy them in the meantime.
They haven't tried it so you cannot say it can't work. Let's not act like some sites don't rely on donations. I'm not talking about paying devs while doing this, just paying for server costs.
You are suggesting something along the lines of "Power went out? Make your own power grid that supplies your entire region!"
This is not a feasible solution for basically anybody.
Of literally every entity affected by this, to date, literally only Valve could maybe pull it off. Because it takes a fuckton of money, time (time you're making zero profits during), and getting a lot of banks to cooperate with you (which also takes a fuckton of the money you're rapidly losing).