Not necessarily, check this comparison:
http://imgur.com/n7OXR.pngTo the left side you have my mockup, for two active workspaces and three open windows. To the right side, you have the current dock with the same number of open windows.
As you see, the extra space is not that much. It takes a bit more space with each extra workspace, but not with each extra window.
Moreover: it gives you a way to save space: do you know how right now some launchers will shrink if they don't fit in the screen? Well, with my proposal launchers
in other workspaces could shrink, while those
in the active workspace would keep their normal size. That would save space while making it much easier to keep track of what you're doing, that is, the windows in your current workspace.