It's like playing a shooter game in the real world, but having to have the device pointing in the right direction in order to see what's actually there. Like using a torch in pitch blackness (Doom 3). This is where a Google Glass / VR-style headgear kind of interface would be perfect.
But since this is all just in "tech demo" stage, I'm probably being too critical. It is "cool".
Tertiary worry: AR advertising.