The TKey is a good design here.
TPMs are a red herring here though, as the TKey is not a plausible replacement for a TPM, which exists to measure a platform boot process. There's not really any way to use a TKey for this, since a) you'd have to load firmware at every boot before the first measurement is taken (i.e., before the BIOS even starts running), which no PC is setup to do, b) you would still be vulnerable to classical MitM of the device, as for any discrete TPM, and unlike modern functional TPMs.
The lack of controlled storage it should be noted does create vulnerability to rollback attacks. It's not really possible to delete data this way.
In any case, with regards to the lack of user-programmable secure elements, it's the industry attitudes here that are the problem. This kind of technology absolutely exists, but it's all under NDA and you can't have it. Smartcards are the most obvious example; you can get nice flash-based programmable smartcards now with 32-bit ARM cores, and no you can't have one. It's ridiculous.
So the TKey is built out of a COTS FPGA, one of the few FPGAs with an open source toolchain (painstakingly reverse engineered). This means it doesn't have any of the silicon hardening that smartcards and other secure element chips have - but there's no choice but to build out of something like this because those chips are all under NDA. The hardware industry doesn't seem to believe in Kerchhoff's principle.
IMO the TKey is basically the best you can do with the publicly available silicon today. In that regard it's pretty good. But a TPM is literally the one application it's least suitable for as a secure element.