I actually think that the screen has a better capability for precision control for FPS compared to a mouse (if you can drag anywhere on the screen). Yes, I play with a keyboard and mouse combo exclusively....

The benefit of the directional control is that it's analog, unlike the keyboard and touchscreen surface offers fine precision control similar to a mouse. But as they are just your fingers, you have far greater dexterity.

The downside is that your hand potentially occludes your vision, but I suspect good players will adapt accordingly.

It would take much getting used to, but so did the keyboard/mouse combo when it began to catch on. I can see playing like this on a flat surface (ie. not holding the device).