Get on the Ruggamatrix site and have a listen to Muggo. His system isn't static and he has also evolved.
But on perhaps this one point I actually agree with Deans (a await the gasps of appoplexy from Cyclo et al at my admission) Muggo's system and its evolution was being read and bettered by the ABs and Boks as well as perhaps the Frogs. As has already been posted it didn't allow for a rapid enough realignment for counter attack as seen by the Wallabies now. Add in the factor that size was a key component of the success of Muggos plan and you can see it was doomed in modern Oz rugby as we just do not have that type of player at this stage.
Yes, im aware that Muggleton would have evolved his teachings over the year, the reality is Muggleton came over to the Wallabies not long after the advent of professionalism, he brought with him a wealth of knowledge on defensive techniques thanks to years of refining it in the professionalism of the NRL, a luxury not afforded to his rugby union counterparts due to the previously amateur state of the game.
John Muggleton came over from the NRL and introduced a very structured heavy drift style of defence, this is the style of defence he perfected in the 90's and from what i hear, its still the style of defence he teaches today.
Drift defence is the style of defence where you show the defender the outside and push across, this worked for Australia during the 90's and early 00's due to the size of the backs, they gifted the attacking team the outside and just pushed them towards the sideline. However it also meant that you have your back to the inside players, the advent of bigger backs and faster forwards running inside angles meant that only the bigger teams could allow time for there attackers to build momentum.
Teams like New Zealand still use a combination of drift defence at times, however having the likes of Carter, Nonu and Smith as the midfield allows this, they are all solid defenders and more often then not perform dominant tackles.
Most International sides now play a up-and-in, blitz or umbrella defensive pattern in modified formats. South Africa perfected the rush defence in the Jake White era, but have since moved on to a up-and-in/umbrella defensive pattern. These defensive patterns are suitable to the smaller, faster backlines but also rely heavily on a mobile forward pack to sweep across.
Many international sides also try a combination of multiple defensive patterns, depending on whether its a scrum, line-out or broken play. However not many top teams limit themselves solitary to 'drift defence'.