Here's an idea I had a few years ago: instead of creating a novel or short stories, you create a bunch of characters and let them write down their adventures in a blog. Of course, the setting needs to be right in order for your people to be able to blog. I can imagine that it won't work for the Lord of the rings characters. However, in a more SF setting, it would work. Imagine you could read up on the adventures from Stargate or Star Trek by reading the crew their blog. Is that something that would work without the support of a novel? You could even take it to the next level by allowing the community to comment which might help your character to make a decision. Is something like this already been done? If so, I would love to see it. If not... I guess there is a reason why not and the idea might not be as good as I thought it would be...
It's an epistolary form, updated from letter/diary format. Personally, I don't see where the presentation makes much of a difference. If you don't provide a real-time level of action it's an overview and readers want to live the story, not just learn the details of it. So in the end it's just a gimmick. Nothing wrong with gimmicks, of course, and there's no reason not to write it as you've suggested. Just remember that in the end, it's a first person story, broken into blog posts rather than chapters, so make it as real-time a presentation as that story would be, when you get into live scenes.
I've done it for one character. I imagine doing it for more than one would be equivalent to writing multiple 1st person povs, simultaneously, which I would find rather exhausting and difficult. But I'm sure it can be done. I suppose another issue is readers. It's hard enough to get lots of readers on one blog, let alone multiple ones. So I'd probably try to popularise one, and as it gains popularity, introduce readers to the other characters (blogs). It's an interesting idea, though.
I did something similar with my autobiography. I decided on a blog vs a novel because the format is a bit looser and more carefree, which is the way I like it. plus it doesn't need to end at the present. I can keep adding new adventures as they happen.
I reckon it could work really well in order to publicise a book before it gets published, kinda like a living prelude which commentators can interact with. That would be cool. But it could also work on its own too. My only warning is that it could soon be all-consuming if it took off and leave you little time to write a book. If money is no object and you are doing it for the love, I can't see that being an issue though. I had an idea for a fictionalised blog where the main character is an emerging superhero and begins blogging about his experiences anonymously. And then films like Chronicle came out and this kinda killed the project for me
There are a huge number of stories published online in serial format. One that sounds quite similar to what you're describing is called The Apocalypse Blog. It's actually quite an entertaining read. It must have been a lot of work to put together, but the author does make money from it - by soliciting donations and selling eBook versions of the story.