It depends on the game, but controls are a huge part of the game experience and many types of games are just fundamentally horrible to play on a particular set of controls. Bad controls will simply ruin a game. I remember the pain of playing Mortal Kombat on a keyboard for example, also bear in mind how long it took for consoles to make FPS games tolerable on a controller. This is worse than that, you might have some luck in porting a touchscreen game over to mouse control or vice versa, but touch control to gamepad?

How on earth would one play "cut the rope" on a controller?

I agree though that it might well be worth the $99 just for use as a media box and to play old arcade ROMs on but the question is whether that is a viable business model for them?