Restaurants like 10 Greek Street do it. According to @Rob_Hyde, the folks at Ciao Bella once came to find him in the pub next door in which he'd gone to sink a pint whilst he was waiting for a table. There's nothing worse than queuing, despite our English tendency to do it at every opportunity.
Queuing outside, like no reservations, is for the benefit of the restaurant. It makes it look cool and desired. But it's not favourable for the customer, who the restaurant should really be trying to impress. Instead, the restaurant is courting the potential customer without thinking about the customer who has already committed to going to the restaurant.
Also, the restaurant has a ready made seemingly unlimited supply of customers, just waiting outside the door. It doesn't even have to make the monumental effort of calling the customer.
My point here is not no-reservations. It is a slight irk of mine to discover I can't make a reservation if I know I'll be in a hurry or if I'm travelling an hour or so that I might not be able to get a table for another hour, but if I can sit in a nice warm bar or nearby pub, I'm ok with that. It's almost like making a reservation on the night anyway. You agree to come back at a certain time, it's just more short-term than making a booking say, a week before. The only difference is that you can't choose the exact time.
My irk is that I could be potentially standing out in the cold for a couple of hours, because the restaurant wants to look popular, and because I'll be so cold and hungry by the time I get in, rat would taste brilliant and a couple of cocktails will go down a little too nicely.
And another thing: why don't places take drinks orders in the queue? They could make shitloads of money - a lot of people would be quite happy to queue if they were drinking. It'd be like standing outside the pub having a drink and a fag. They take your card and put the drink on your tab. Simple.
I can just about handle no-reservations now, but don't make everyone stand outside for your own ego.
Which is exactly what the restaurant hopes for...