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.