That little crane was a bad idea, but I believe there were ideas involving a rotating rail system that seemed far more viable and there's attempts from the USN using a far larger crane on the replenishment vessel to do the same thing.
So the idea certainly isn't impossible, and its probably being actively worked on. Yeah, you probably need a favorable sea state to do it, but there's plenty of things that naval ships can to do that are impossible in certain sea states.
Edit:
Says they are trying for a system that can reload in Sea State 5, which should be more than sufficient.
The French are having a go at it, too (I didn't see a mention of maximum sea state, though):