If anyone is curious there is
now a gameplay demonstration of the steam controller. It demonstrated Portal 2, Civ 5 and Papers Please. All of which are very mouse heavy and the controller seemed to perform decently well. It still likely to be crippled in most PC games due to the lack of hotkeys which is particularly noticeable in the Civ 5 gameplay where actions are incredibly slow.
Unfortunately they didn't show off a precision platformer like Super Meat Boy or a console aRPG like Dark Souls which is where the performance of the controller I'm the most interested in. I'm still standing by my assessment that the steam controller will perform worse in those genres, which to my knowledge, are the only genres where controllers are objectively better than keyboard and mouse.
I know that the steam controller is not necessarily trying to be better than other controllers but instead offering an alternative to keyboard and mouse for people who want to PC game on the couch. However I still think there might be some merit in the trackpad design that could offer a lot more precision over a thumbstick. The design of the controller, particularly delegating the XYAB buttons to a much less prominent location, leaves a lot to be desired and seems to lack some utility as a general controller.