As a return system, it works. It is possible, and the best pipe size would be 1 - 2 sizes above the pump outlet size. This is the closed loop described by Anthony Calfo, on several occasions.
Generally, this type of return is used in a vain attempt to eliminate the need for power heads, and drilling multiple holes in the back of the tank is inconvenient, or undesirable. Water leaves the tank at the top, and returns to the top of the tank. Either in one place, or in this case multiple points. However, the water still returns to the top of the tank. To eliminate the power heads, there would need to be multi level outlets, (different depths) with the ability to alter the flow patterns on the fly, and would require a considerably larger pump. Even the more "common" definition of a closed loop does not really accomplish this.
However, you turn the pump on, and water will flow through this type of system, with less loss than two dead ended branches, so in that sense yes--it works. Is it worth the effort to build it? Well, IMO, no.
A single smallish power head, placed in the vicinity of a single return outlet, and angled slightly down into the tank, will accomplish more.