This appears to be a variant of a technique known in the research literature as Quikwriting [1] (a type of FlowMenu [2]), which you can still try online [3]. There hasn't been much in the way of evaluation of Quickwriting, but one study found people's initial performance was around 4WPM, increasing to 16WPM after five hours of practice [4].

I haven't used 8pen's implementation (so I don't know how their version differs), but I imagine it has a similarly steep learning curve.

[1] http://dl.acm.org/citation.cfm?id=288613 [2] http://dl.acm.org/citation.cfm?id=354401.354778 [3] http://www.mrl.nyu.edu/perlin/demos/quikwriting.html [4] http://dl.acm.org/citation.cfm?id=1028014.1028031