I think there is a future for LCD touch-screens in video-game controllers.
I think they will be smaller, though, more along the lines of the Vita's screen, and they won't be marketed as the focus of the system but as an enhancement. Forget the gimmicks, there are some legitimate and practical uses that would benefit games and it makes for a nice media controller.
If it were closer to standard, I think third-parties could really take advantage of it. They're the ones who make the kind of games where it could really be useful. Inventory screens, crafting, quick access skill changes, RTS functions; it's kind of funny that many Nintendo games don't really feature a lot of the stuff that could really use the touch screen on a fundamental level.
