That's what I used to think. I used to think that controller was only superior in terms of movement.
But after playing around with XNA I realize that the analog sticks are extremely sensitive and the accuracy is amazing.
So I wouldn't label it as an accuracy issue, but rather the fact that our thumbs simply do not have the capacity to be that precise. Whereas using a mouse with our wrists benefit from a large range of movement, thus we can reduce the sensitivity to match our skills.
Ie. Two millimeter movement with a mouse translates to 0.2 millimeter movement on an analog stick. Most gamers aren't at that point in skill yet, and I think most gamers will never reach that sort of skill.
I think games like GRAW and GoW that allow you to have variable sensitivities during gameplay overcome this issue. Lost Planet is another example, though it does it a bit differently.
To be honest if it works as smoothly or even close to as smooth as a mouse does, I'm all for it. I hate console FPS so this could make all the wonderful shooters playable for me.
What he said was pretty accurate, just like a controller!
Anyways, I'd love it if there was actually a Nunchuck + Mouse solution. That seems absurdly ideal for games that don't need 50 bazillion keys on a keyboard.