The only problem (and it's a significant one, in my book) is the lack of real keys and real tactile feedback.
Whenever I envisioned such a "morphing" user interface for HP calculators, I imagined a little LCD on every keytop and an LCD keyboard face surrounding them -- these could/would change the keytop and keyaboard legends in concert with different modes of operation, menu options, or custom key assignments. All of this, of course, while preserving discrete, palpable key buttons.
That ain't gonna happen, even though they'd only need to make two (or maybe a few) different keycaps -- the legends would all be "soft", and come alive at startup.
Who knows, maybe with the evolution of operating systems, software and connectivity, and the blending of computers, telephones, pagers, cameras, recorders, video players, GPS receivers and internet email/chat ports, perhaps the only way to profit in personal electronics will be to offer customizable handheld devices that can be FULLY configured to the user's needs?
With enough competition for delivery of the most distinctive and easily-used personal hardware, development of a device offering "intelligent keytops" may one day be, in fact, a rational, economically promising endeavor . . .
Isn't it generally true that money invested in improving the person/machine interface is wisely spent?