New language on top of PHP?
The reason CoffeScript is a good idea is that if developers want to run code in a client browser they have to use javascript; so the only way to program in a different language is to allow that language to be convertible to javascript.
I'm not sure the same really applies to server side programming. If you've got issues with PHP and want to use a new language there is no real advantage to having that language generate PHP.
On the other hand, a language that was very similar to PHP, but fixed some of the flaws would be a great idea.
The idea is definitely not stupid, especially if executed well.
I like coffeescript a lot, but it has it's approach has downsides as well. Debugging a coffeescript script still requires you read the generated Javascript code, which can be tedious, since you haven't written it actually yourself.
I've understood that Jeremy Ashkenas, the creator of coffeescript has started to work on coffeescript after reading "Create your own freaking awesome programming language" by Marc-André Cournoyer.
Good luck!