The same type offer was made to Bruno Richard Hauptman about the kidnap and death of the Lindbergh baby. It's obviously been done in American justice for some time.
It's still done. Suspected drug dealers routinely face a version of it (with less serious consequences). If the accused is guilty it can be very effective. But if he's innocent...?
Do you really have so much confidence in our system of justice? In any system of human justice? What was the purpose of the Fifth amendment if not to prevent government from using its overwhelming power to extort confessions?