Iain, from the site Josh linked to:
Why not just show a simple upgrade banner? Or why not just fix the bugs and get sites working in old versions?
The problem is some users just don't upgrade! And the reasons is very simple, some just don't care, some don't know how to, and some can't because of their IT department. In any case, as long as old versions of a browser remain the default on a computer, people will use it and developers will be forced to continue to develop for it.
TBH, I don't expect this approach to work either.
Edit: Scrolled all the way down. There are five websites participating so far. :P
Edit 2: Facebook started
phasing out support for IE7 at the end of last year. I don't expect them to start targeting IE8 anytime soon. ;)