If everyone AIMed their holdings, volatility would not necessarily go down because AIM's recommendations depend on the value of a portfolio (which is dependent on the share price of the stocks in that portfolio) when that portfolio was started.
So as long as people started with significantly different portfolio values (due to share price, not dollars invested), then volatility could remain high.
AIM could also work, if everybody used it, because stocks aren't perfectly correlated. Therefore some people might be selling stocks in one sector and transferring their money to stocks in another sector. This would allow everyone to AIM quite happily. However there's no argument that AIM (as with any system) is easier to work with when the majority of people are using another strategy.
Even Buy and Hold could work if everyone used it because Buy and Hold is really, "Buy and Hold for a long time and then sell."
So assuming you have 65 years-olds selling after holding a stock for 40 years and 25 year-olds buying for the first time, that could work. However with the future predicted excess of 65 year olds over 25 year olds, the market's liquidity (and value) would decline rapidly (i.e. too many sellers, not enough buyers).
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