Real had their historic winning streak (20 wins in a row in all competitions) with that exact setup in 2014/15.
They also beat Barcelona 3-1 during that streak, when they played 4-2-2-2 with Kroos & Modric as a double pivot and Isco/James as AM/winger-hybrids. Here's a match report that is in accordance with my memory:
http://outsideoftheboot.com/2014/10...-el-clasico-won-by-marcelo-iscos-partnership/
It all turned to shite that season only when Modric was injured (Benzema too, later on) and Kroos was overworked and tired because of the absence of any kind of rotation under Ancelotti. Before that it worked pretty well - and Kroos has improved defensively since then and they didn't have Pogba, who has a better defensive presence than James or Isco. (I disagree with
@ti vu on that issue.)
As I said, it has worked before, it can work in the future. It's a matter of tactical setup, teamwork and fine tuning. See the examples above.