Yes. The PoS system described should be difficulty to game and has an enforced reward below that of PoW, so PoW should always be the dominant source of coins.
One shortcoming with PoS as I described is that if someone buys 40% of all the coins and hoards them, they will be eligible to get a bunch of stake blocks all at the same time. If they could spam them fast enough they might be able to fork the network briefly, but only for four minutes average at most (and if something weird is going on inside the chain of blocks, clients should reject them anyway).
I should probably add to the whitepaper that (1/129600) * total number of coins is the minimum number of coins required to grab a stake block, but that if you have multiples of that are all the same age you can grab a bunch consecutively if you so want to. I assumed that the wallet would be implemented to do this automatically, but it may not have been clear from the whitepaper that this happened.
I guess you can also enforce throughout the network to only accept one stake block maximum every two minutes and reject the rest to help even out the distribution of stake blocks over time.
Edit: Yeah, I see a weakness now. There should be some sort of measure to ensure a minimum time between PoS blocks of 1.5 or 2.0 minutes. I don't think it'll be that hard to enforce -- just make the network reject the PoS blocks if the timestamp is too close to that of the previous timestamp.
Are you sure you want to enforce it like that?
Because all other crypto-currencies don't have a hard limit. Bitcoin blocks could be found 1-2 minutes away from each other and that's allowed. You should control stake blocks off of the difficulty it is too mine them.
It's based off of hashing right? It's luck and the difficulty factor determines when the blocks are found. Having Pow, PoS, one after another would be very unlikely.