Blimey, this hit a nerve ;)
Personally I think it looks great. When developed it looks like it will take a deal of skill to get anything decent out of it. It's not a guitar but then again neither is a Theremin (also played by moving the hands and not fingering "real" notes) but that doesn't diminish the intrinsic worth of the technology.
I prefer to look at it as a new instrument. Put aside preconceptions of a guitar and view it as a new form of expression.
I don't think it'll either encourage or discourage would be players but it looks damn good fun and knowing how cheap technology becomes I expect an affordable fully working version in a year or two. Might even get one myself :D
Cheers
Dick