This looks seriously disappointing.  If anything, it looks more like a controller that the PS3 would use... what with "the PS3 is not a gaming device!" that wacko father of the PS had been spewing.  Still, I'd be extremely surprised if we don't get a standard controller.  Honestly, I do NOT see this as being a problem.  It really depends on how the coding can be acheived.  If the routines require a certain controller be plugged in to work (such as the way USB mics work with the PS2), then it'd be a problem.  If not, then people could decide to use their Gamecube controller instead (or buy one for about the price of a memory card), or maybe a different style controller.
Another possibility is controller remapping based on what is available (such as playing DDR/Racing game with a controller, instead of a dancepad/wheel).  It may take some creative programming, but games could be done such that you remap buttons if controller X is connected instead of controller Y.  This would work just fine for the majority of games out there.  Yes, going from essentially 14 (including Dpad)  buttons to 8 (including dpad) is a pain... but do you REALLY need all those buttons?  Racing games... Accelerate, Brake... (extra: hand break, horn, camera, boost).  Fighting games... Punch, Kick (extra: block, run, special, hard/medium/light).  Adventure/Platformers... Zelda showed us that 2 buttons, plus a Z lock, were enough (contextual buttons).  RPGs... come on, do we need to map spells to individual buttons?  It's not so hard to use a list instead.
It just hurts because I love Nintendo.  I'm sure most gamers over the age of 21 still harkon back to the NES/SNES days.  I'm happy to see a company try to evolve past the "tried and true."  If not for them, we'd all still be riding in horse and carraiges.  It's a HUGE risk, and it's sad to think what might happen if it doesn't pay off for Nintendo.  Who knows, if Nintendo manages to get a good install base, developers might flock to them instead... forcing MS and Sony to come up with similar controllers.  Yes, it is nice in this dream world I live in...   But hey, don't forget about Steel Battalion and it's $250 controller.  If people are willing to buy that, then I'm sure they'd spend $25 to buy a "standard" controller.