Excellent idea. And it works pretty well. I think I'd like it better if the gate palette were visible the whole time while you're in building mode (not just when the mouse moves up). Maybe it could have a different background to show that it's not part of the circuit. But it would be much clearer what to do.

Thank you, - and OK, the instructions are pretty short. To connect red inputs to green(or black) outputs simply drag from the input to the output. You get a wire (lead) as a straight line. Intentionally it is not possible to connect two outputs. Add pads later (right click on the wire). Try the letter L to get a working sample, an adder for two two-bit-numbers. I will think about the palette, actually I was proutd it worked and left more space for the circuit. What I am missing most, is a way to mark and drag (or even copy and paste) more than one gate.