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Why would anyone want a screen on the controller?

Well, for one you have all the advantages of the second screen on the DS. Unless you absolutely hated the DS as a concept, you can't fault this. It will reduce interface clutter first and foremost, but it will also support multiple play perspectives, information hiding, asymetric play modes, etc. The touchscreen and gyroskope also both lend themselves to unique ways of interaction.

I can imagine a horror game where the main character's viewpoint is displayed on the controller, showing paranormal manifestations or subjective experiences that can't be seen or interacted with on the main screen. It's something that is neither superficial, nor possible on any other system.

I think the controller might be somewhat feature-stuffed, but the core idea of it the best thing I've seen out of Nintendo since the DS. Just the possibilites of how this might be used in a new Zelda - Skyward Sword has nothing on that, even ignoring the fact that a WiiU game will likely use the Wiimote, as well. Of course, I'm also looking forward to a Four Swords 3DS/WiiU crossover. Ah, to a Zelda fan these days...