There is a limit to how many switches you can have at the same time on an analogue input port. This depends on the accuracy of your resistors and the accuracy of the A/D. The A/D is only 10 bits so you won't be able to exceed this, you might if you are lucky be able to get 8 switches to read but more likely 6.
The other problem is lack of speed, reading the A/D is quite slow and you will miss pulses if you are too fast turning them.
Increasing in value, or all the same?
It depends on what sort of D/A you want to implement, a binary weighted adder or an R/2R ladder, each has it's own advantages / disadvantages.