I don't understand the problem with traditional mouse+kb for couch gaming. I've been using it for years and haven't encountered any drawbacks (using wireless mouse+kb combo). Am able to play online FPS and RTS, both of which require extreme precision and extreme low latency, at very high levels.
You use a solid mousemat, place that on the couch beside you. The keyboard goes in your lap. Kick your feet up and game away. It works great.
This controller looks like trying to reinvent the wheel, and I just don't think that it'll work. The problem which all of these schemes have is that they make you uncomptetive versus mouse+kb foes in multiplayer games. No one has ever been able to match the precision and control of mouse+kb, and even if this solution is far better than previously attempts, it will still likely not be anywhere near the traditional control.
For 'casual' single player games, it'll work great. I'm sure that's a large part of the market for SteamBox. But for the hardcore, it probably won't work at all. I think they'd be better off finding a solution which incorporates traditional mouse+kb than trying to work around it, but that's just my opinion from the outside looking in.