You could use hall effect, but if you just want non-contact sensing then capacitive sensing would be perfectly acceptable (c.f. Model F). I'm not sure what hall effect sensing would gain you in typical usage; it would certainly bulk up the keyboard and make it more expensive (i.e. you can no longer just plonk down a PCB with some capsense pads underneath, you need hall effect sensors under each key which starts getting pricey and bulky).
Nothing wrong with the way it would work though; it would probably last a thousand years too
Above all, my goal here is to experiment/have fun, so practicality is not my major concern.
That being said, there are, IMO, a few somewhat practical reasons to not use capacitive sensing:
1. I have had issues in the past with reliability of capacitive sensors. To be fair, this is probably just my own fault and/or bias.
2. AFAIK, Unicomp does not sell capacitive flippies, meaning I'd have to make my own and/or harvest them from old keyboards. Making the carbon infused resin is probably beyond my capabilities.
3. I really like the idea of a super reliable keyboard, and hall-effect designs are certainly that.
4. I don't believe anyone has managed to DIY a capacitive sensing PCB yet, I remember reading in a few other threads about people having trouble with this.
As for price, I actually don't think this would be a huge issue. The magnets themselves are pretty cheep, you can find packs of a 100 or so for around $15. As for the sensors, IIRC, Digikey has them for around $0.40 In quantities of a hundred, or $40 total.