Would I have to wait in the store for 10 minutes to an hour for them to get block confirmation?  That's one of the problems with any offline system, is trust that you won't run back home and invalidate the 'coupon' before the merchant can.

Technology wise, a lot would have to happen of course.  Typical laser scanned 1D bar codes would not be sufficient to support such a long key.  Data matrices such as QR-Code would work, however, that would mean CCD based photo-scanning hardware at the merchant.  Even if Walmart or BestBuy were to take initiative, the upgrade will cost an easy million$ or 10 to reach all of their outlets.

It would be best to piggyback on Google's (et al) mobile payment systems, where the providers are willing to give away free hardware to get their standard recognized first.