Anti-Apple rhetoric aside, this is simply proof that the gaming market is bigger than anyone realizes. It fills space like gases fill volumes.
Whether or not a large touch screen is suitable for ALL games, there are some games that will do very well on that platform. Need I mention the Wii? Some stuff works. Others, not so much.
If anything, as often-marginalized gamers, we should be holding the iTouch/Pad up as precedent that gaming is truly mainstream, for expert and novice alike, and that proper development and delivery is still untapped.