How many network people still have bad dreams about NetEdges? MFS did just what you are proposing, and the number of nasty corner cases showed that this was just not a good idea.
Me, for one. :) Using bridges devices to carry LAN traffic across the wide area presents its own "interesting" set of problems. But it is possible to make it work. For co-located routers, using gig-ether switches as an alternative to Gigaswitches should be a fine idea, in theory anyway. Assuming of course the switches are sufficiently beefy, and behave well. (Another source of bad dreams...) LAN and virtual-circuit based exchanges do solve slightly different problems, though. A vc fabric (such as ATM) can be used where the peers want something looking more like "virtual private peering" with some enforcement by the exchange medium. And something that runs directly over the existing transmission infrastructure (SONET) is better for peers who don't want to colocate routers, since there doesn't have to be a performance penalty or the added complexity of protocol translation. Switched LANs are great when everyone is already in the same room, and the exchange medium isn't reqired to enforce peering policy. And of course true private peering will continue to have a major role. Steve