I think the concept is great. There's a lot of potential in not being able to see the threats when you are moving. The things I would change would be the enemies to move in turns and the camera turns to not be so big or having the enemies move in a grid, so they can always be pointed at.
I like the graphics too, this is how I imagine an FPS in a gameboy. I would give a little bit more contrast to the color palette because sometimes is a little hard to see.