Actually, a few weeks ago, I started toying with such idea in my mind, but I didn't know how it could've been made correctly ehough. Free-form screen would allow to get both Off-TV and implementing more interactions with the game's world without restrictions far more. Especially if the touch panel is haptic (the technology I think Nintendo could implement next gen, since it's, literally, the next generation of touch screens). Guide lines around circle pads, helping in detecting what to do with what inputs, touch buttons that can be arranged as much as you want to allow for the most comfortable setup for everyone, maps and menus right on the controller/remote...and haptic would allow much better tangible feedback for touch buttons and elements in games (weapons, fur, faces, etc.). Very versatile, different ways of using it, and actually more fascinating for the more casual customer than a mere GamePad with limited interaction possibilities (compared to this setup, I mean). Of coure, there would be a new Nunchuk as well, with some other buttons, and (possibly) wirelessly connected with the Controller.
There are still concerns about it, though, like...where the D-Pad would go? And the A/B/X/Y ones? Envisioning this as both a standard controller and a Wiimote-like, you need to place them in a way that they're reachable when you're playing "traditionally" / Off-TV and that they're not obtrusive when you're playing by using it as a remote. For example: if you place the D-Pad right behind the circle pad when you see the controller horizontally, you'd have the D-Pad attached to the circle pad when in vertical. That can create usage problems. Especially considering how both circle pads should be placed centered, allowing both left and right thumbs to reach it. Placing it under the Circle Pad, and slightly more towards the inner part of the front face would partially solve this, but not completely. A possible solution would be putting the D-Pad on the Nunchuk, right under its own circle pad (Nunchuk would, again, present a different shape from the Controller/Remote). But that would require Circle Pads to be as precise as possible, since, when using the controller for Off Tv or as a semi-normal controller, you have to rely on them even for games that could be better played with D-Pads. Now, since the patented circle pads seem to have interesting usages (like for inputting keyboards' letters/numbers), or to select in Skyward Sword-like menus by clicking on them, maybe it's actually possible? Just a sincere question.
I suppose placing A/B/X/Y buttons could be easier, done in different ways. I suppose even placing them all under the other circle pad (more traditional), the one that doesn't get used when in remote mode could be fiesable, since we're assuming the controller to be long enough to accomodate the game displayed between the control zones, in 16:9, in Off-TV mode. The hand wouldn't be distuberd by them.
Oh, of course, behind the controller, there would be indeed one or two supplementary buttons (like the B button on the Wiimote), hidden in the shell when it's used as a controller and usable when it's in remote mode.
Just a first, quick thought about it. Free to correct my idea/fix it/scratch it. I could even draw a sketch to see better if it's possible/comfortable, but I don't know if I'll have time in these next days.
EDIT: I'd really like your opinion on this, even if it's quite long, so I know it's not an attractive reading XD