People used to insulate with wood chips in this country 70 years ago, the wood chips would settle, resulting in the walls being cold at the top.

That is why insulation is used now, also, vapour barrier is required at the warm/cold interface or moisture from the warm space will condense into the wood rotting it. This building is doomed to rot. Back in the old days plaster was used to create a vapour barrier.

Great idea to use old carpenter building without glue methods! 
It certainly requires many trees to get enough wood legos to build that house; is that really eco friendly?

And how about heating and cooling expenses in a poorly insulated house like this? For sure that is not sustainable at least