I suspect that they are being a bit disingenuous with the idea that they let the players "invent" their powers. I seriously doubt they'll let me build an atom smasher. The game will more likely employ classic slight of hand to make you feel as though you are creating something, when in fact you will still, by and large, be building one of a handful of possible device with abilities pre-planned by the game designers- basically not that different from being able to mix and match weapons, items and spells/powers in an RPG. Not a bad thing (inherently, anyway - we'll see how well it's executed), just a further blurring of the genres that we have been seing for the past few years. I think I'd say it's clever, more than genius (which, if it's there, will be seen in the execution).
As for the limits of traditional platformers, that's sort of the point. Remove the limits, the challenge starts to fall by the way side. Platformers have always had a bit of a puzzle-element to them in their problem solving (how to get from A to B), and if you can simply remove all the rules... well, it'd be like completing a crossword puzzle by writing in random letters. Those rules and restrictions are part of the charm of the genre. But that's not to say we couldn't use an outgrowth from the traditional platformer into something new, either.
