the physical size of buttons/knobs/sliders requires devices to be large enough to accommodate those elements. with a chip like soli, designers can create devices that are dramatically smaller.
as the soli gets smaller (which future versions likely will), you can imagine tiny devices that maintain rich interactivity.
Exactly. I also prefer physical buttons but imagine what could be done in terms of reducing space taken by controls alone. This is in many ways vastly better than touchscreen interfaces since it will allow for many different kinds of interaction in the same space.
as the soli gets smaller (which future versions likely will), you can imagine tiny devices that maintain rich interactivity.