The concept idea I think it's interesting. I'm not sure about the part about the player writing the responses, it's more technically feasible to achieve the classic 'dialog options' method where the player just made clic in pre-made responses. Unless you have a method of parsing text already, in that case, forget my suggestion. :-)
Well, the thing that makes it easier is that there are only a few highlighted words that will trigger unique dialogue, because if you write something completely unrelated to the conversation, the outcome will be entirely different. I think it would be something along the lines of the protagonist becoming increasingly confused. The text box idea also opens up the possibility of having some secret options, as well as forcing the reader to pay at least some attention. I've made the basic system for how it will work and tested it a bit. It works for now, but who knows, perhaps I'll make some changes later if it turns out to be unmanageable in the long run.