There's a (mostly) serverless file transfer tool whose name escapes me at the moment that uses this method to exchange the actual keys for the secure transfer..

There's a (mostly) serverless file transfer tool whose name escapes me at the moment that uses this method to exchange the actual keys for the secure transfer...but it works there because the connection is only available for initiation, for that specific host and port, for a pretty limited period of time. The key is also one-use. In this case the 'server' is up for an extended period of time, presumably, and the public key is both the address and authentication (unless you turn on requiring a specific key on the initiator, I think? I only glanced at the docs.) With enough nodes you'd end up with multiple nodes having the same words (divide the possible keyspace by the possible combination of words and you'll get a very large number), and also you'd be at significant risk of people finding nodes just by banging away trying to connect to different 3-word addresses. I agree that the tool seems to be intended for same-party use.