Nintendo might be aiming for a sleeker, more portable and savvy look. A screen with no holes in it for buttons to protrude might fit that image. Also, relying less on buttons means that the iphone/ipad target audience might respond a it better to the device, so there's that.
For games, especially action-centric titles like- oh, I don't know, platformers, character action games, and many others- tactile feedback is much more rewarding and responsive. Unless these touch buttons come with some sort of haptic feedback that is centralized around a specific area(since "rumble" on the entire device for one button press would be stupid), it is a clear step back, and not one I'm remotely interested in toying around with.