I see that this is about a way of writing SQL, but as Literate Programming is cited in the title, I wanted to point out that you can already use the true Literate Programming tool noweb to write SQL with or without "with" statements.
The advantage is that you'll be able to write full documentation amongst the SQL, present it in any order, and reuse chunks.
The disadvantage is that it outputs to stdout, so if that's no good for your task then it's no help.
Well, stdout can be redirected in any sane environment, so that's not much pf a disadvantage. However, thanks for making the point that what they're describing (good variable naming practices, and the use of 'with' to prefix them) is hardly what Knuth was talking about when he coined "Literate Programming".
The advantage is that you'll be able to write full documentation amongst the SQL, present it in any order, and reuse chunks.
The disadvantage is that it outputs to stdout, so if that's no good for your task then it's no help.