http://www.youtube.com/watch?v=lUWy2GW7XQ4The Xtortionist said:And how will you be able to determine exactly where your thumb is without looking at the touch screen? Having physical buttons allows you to "feel" your way around the controller.
They've got a multi touch screen available now as well:
http://batterytimes.info/immersion-provides-multi-touch-screen-with-haptic-feedback-from/