This is a cool toy but it doesn't really seem to address the main issue of writing code on a touch device; typing on a touch device sucks.

Moving code around is not a difficult problem to solve. Drag to highlight, grab it and move it somewhere else. You've done that elegantly.

But writing massive amounts of code on a device without a traditional keyboard is awful and that's the difficult problem to solve. Until that's solved I don't think anyone can claim to have made real progress enabling development on keyboardless devices.