Anyway, wherever it winds up (and as there were precursors to Pilsudski's version, a case could be made for leaving it where it stands) the Wikipedia article you cite mentions all the rocks and whirlpools which caused the idea to founder and sink repeatedly.
Central Europe was beset by too many centrifugal forces, including distrust of Polish ambition, and disagreement about both the priority of defeating and as far as possible dismembering Russia that was Pilsudski's ambition and, where they agreed that Russia should be opposed, disagreement about how to do so. The Entente powers were concerned to defeat the Soviet regime but with a view to restoring a strong but non-radical Russia and were not interested in breaking Russia up; therefore Pilsudski was not interested in aiding the Russian Whites. Skepticism of various putative partners in the federation about Polish ambitions is strongly cited in the article; I'd add that had that specific objection been dealt with in some convincing way, in general we could expect a lot of mistrust of the various partners in the federation of each other across the board.
Pilsudki's opposition in Poland included those who disapproved of his sweeping vision because being a respectable member in a multi-ethnic bloc organization would put on a damper on the dream some had of creating a more "pure" Polish state where minorities would be Polonized. Again I presume similar chauvinistic tendencies in the other new Central European states would also assert themselves. These nations had just torn loose of several large empires where their new dominant nationalities were only yesterday subordinate small frogs in a big pond; presumably the idea of trading that for another polyglot empire, even one run on federal and consensual lines, did not appeal to many who now wanted to lord it unchecked over their separate small ponds.
Obviously if Poles oppressed Slovakians, or Czechs oppressed Poles, or Hungarians continued to see themselves as some kind of master race entitled at the very least to lording over minorities within Hungary's shrunken borders, this would lead to conflicts with the neighboring nations of the Federation where one nation's minorities become another's ruling majorities. So if such a federation could be carried off, it would have to be one that in general supported the minorities in each state against the local majority. Such a regime would be good one IMHO, but it seems unlikely that the various ruling cliques in each state would tolerate the actual implementation of such protection within their own borders, however much agreement there might have been that these were fine principles (applied, that is, to protecting each nation's minorities in their neighboring states.
What kind of economy would the unified region have? One commonality most of the proposed members of the union would have is that they all were rather backward and underdeveloped compared to Western Europe. After all, what we have here is sort of the region the Germans thought of as "Mitteleuropa," while thinking they would naturally dominate it. If not the Germans, or their Western rivals Britain and/or France, and not the Soviet Union, then who would lead its development economically? I'm guessing the Czechs, but on one hand Bohemia itself was not I think sufficiently developed to do much to galvanize development in the region as a whole very strongly, and on the other was sufficiently advanced ahead of the regional average to rouse suspicion, mistrust, and resentment.
If Pilsudski were as good as his word and the region would be run by a democratic and multilateral collective leadership without strongly favoring one partner, in its politics there might naturally arise a "Polish faction" for strong autocratic government, a firm hand against radical leftists (whose definition, if these guys went unchecked, might broaden to include views considered merely moderate in the West) and a general backing of the old countryside landed gentry, versus a "Czech faction" favoring a faster-paced, more industrial and cosmopolitan society favoring newer, commercial money and tolerant of, indeed dependent on to some extent, rather radical economic populism. OTL the former faction pretty much held sway in most of Central Europe and if such a Federation were to make a go of it economically, I daresay they'd see themselves as losers, even though if they could only see how they might avoid the disasters of first Nazi and then Soviet conquest they might realize that even diminished power in an independent society is better than subjugation by either of those empires, and even though with combined economic and military forces everyone, themselves included, might conceivably be much better off than their OTL counterparts in say 1937.
A factor not specifically mentioned in the article but which I thought of before reading it is that these nations had been parts of three separate empires--German, Austro-Hungarian, Russian--and the seams between the former empires would be cultural and institutional fault lines. Perhaps one reason Pilsudski could have this vision was that Poland itself had to somehow fuse regions from all three former regimes; confidence that Poland could nevertheless be a unified nation would no doubt carry over to a more sanguine vision of federating the whole sweep of the former dependencies into one. But of course such a broad federation would lack the glue of a strong sense of nationality that enabled Poland to come together and stay that way.
Broadly speaking, the notion was little more than a hope and wish of Pilsudskis and some of his predecessors, tellingly all Poles; I suspect the naysayers and skeptics were quite shrewd in their judgement that it would at bottom spell a Greater Poland and that the prospect of realistically addressing all the rivalries and finding a genuine balance within the Federation was so remote as to be not worth thinking about.