While it seems very cosy to those who like it, it may not be suitable for damp climates like equatorial countries, where moisture seepage into and through the walls may become a problem.
However, by building into the hillside, many environmental problems can be minimised. Also, it could be a fantastic way to prevent landslides.
IMO this is better for certain climates.

The moisture wouldn't really be a problem You can still climate control the space. The problem in the states is we have strict building laws that would never allow such things. Unless you spent a million dollars on engineers proving that it is viable even then it would be a long shot. You would have to live in a county that has almost no building code and or build it and hope no one ever comes to investigate

I wonder how many mosquito bites they get living in a wetland...
can't imagine why they thought a wet courtyard was a good idea.

Michael Mantion,
You're mistaken. Earth-sheltered houses have existed in the United States since at least the 1970s, when the Arab oil embargo and the energy crisis made them attractive, although interest in them dried up after the 1980s. There's nothing new or structurally unproven about them. It's just that they've never really caught on because most Americans like to live above ground with lots of window views. Check out old issues of Popular Science from that era and you'll find lots of articles and even cover stories about earth-sheltered homes and underground homes.

Nantha Kumar Nithiahnanthan, are you making the same assumptions about this buiding design as you would a full basement? Proper foundation drainage and foundation sealing will effective address unwanted porosity of the concrete. Proper foundation and site drainage used along with dry wells handles most situations ,leaving inside and outside sealing of walls that are below grade, sump pumps, French drains and many other techniques in reserve for future potential problems that might arise.
That is not to say that 'all' wet or damp sites locations are financially practical for below grade construction. Think about the foundations of the World Trade Center. If the architects and engineers can handle the infiltration caused by the water pressure from the nearby New York River - one of the wettest lots on the face of the Earth, then your pessimism could use a rethink.

NK Fro,
I was house-hunting in the aftermath of Hurricane Irene here in Pennsylvania, and every single house I looked at had evidence of water problems in the basement. If your entire house is effectively a basement, you could be driven out of your house by flooding at the worst possible time. Sumps and the like can mitigate water problems during normal conditions, but tend to fail in actual emergencies, especially when the power goes out.
I would also worry about termites. And then there's the issue of having to mow the roof! :)

It's built into a hill, so drainage may not be a problem as the whole thing may be above ground level.
The water feature wouldn't be allowed unless you fenced it, to prevent drowning the kiddies.

One useful factor in building unusual homes, (other than location) is size. Many places don't require permits for structures under a certain size. As for flooding and climates, why is New Orleans not built up more? Why aren't more municipal buildings built like oil rigs in case of floods?
Or,when considering the areas like the Ninth Ward that largely remain in ruins,why not dig them out, flood them and make them more like Venice,Italy?
If you want to read a case history of disaster, read up on Louisiana's Levee system.
How is it that the Federal Government tells everybody what to do and how to do it... yet they pursue such horribly wasteful, extravagant and illogical means & methods of going about their projects?
"You can't do that- it's not approved." By who? The Army Corps of Engineers?
They wrought more "wetlands" destruction than everybody else put together! Never trust an "expert" with no practical experience!

Griffin; New Orleans started out fine. But it's a delta, and when you deflect the deposits that keep building it up, it sinks. There's no cure. Either let new mud gradually bury the city, or let it gradually get deeper and deeper in the ground. Below sea level.

Jon A., your observation of water in the basement is an indictment against the builder of those home, not the design. There's a contractor who owned and operating an old-fashioned country store in Black Gnat, KY who built approx. 45 berm homes within a mile of his store. He had the reputation of being extremely detail oriented - 'do the work right the first time'. He had very few water infiltration reports 15 to 20 years down the road. Those that had water problems were due to settling over the years and were remedied by restoring the original yard drainage slopes.