Sounds like there are way too many issues with this, though we'd probably need to know more.
If the top speed is limited to 70mph for example, people could still speed in residential zones etc. It also doesn't address the issue of the car's power - it's not always about the speed, sometimes it's how long it takes to get to that speed. For example an inexperienced driver trying to get from 0-30, 40, 50 etc as fast as possible (with all his chavvy mates in the car) is going to be concentrating far too much on the car's speed and not enough on the potential hazards around him...
(Yes I know that is a very stereotypical view and I realise not everyone is an idiot and/or chav when they are young
)