I haven't commented on this yet.
So I think this could be real, and work fine.
RE: point of no buttons: In theory, the pure touchscreen interface could allow for a variety of simulated buttons, and other inputs — levers to toggle, dials to spin, lines to trace, things to pinch and pull, etc. You could also rearrange buttons, resize them, reshape them. Heck, with good haptic feedback they could possibly approximate different "textures" and "dimensionality." Say what you will about their online, etc, but Nintendo is pretty particular about the feel and functionality of their console controllers. I don't think they'd be prototyping this unless they felt the inputs worked.