Well, a touch screen keyboard isn't actually bad in some ways:

• It reacts very fast since the keypress occurs as soon as you touch the "key", without the delay of moving the key physically
• It is ergonomic, since no force has to be applied to pressing they key. Note that the lack of physical movement of the keys don't really mean a disadvantage, you can type much "softer", hitting the keys with much less force on a touch keyboard. This also increases typing speed.
• It can change configuration dynamically, such as depending on what app it is being used for, or depending on keyboard modifiers you are touching at the moment.

The main problems for touch typing on a touch keyboard:

• There is no physical feedback to tell you where on the keyboard you are touching it (are you right, left or center to hitting the key? Or are you just between two keys?).
• Compared to a full-size keyboard, a mobile phone keyboard is much smaller, making touch typing harder.
• When maximizing the size of a virtual keyboard by placing the phone in landscape mode, so little screen real-estate remains for the application that it often becomes a problem to navigate the text-entry fields.

If you are able to get past the pre-conception that the longer key-travel a keyboard has, the more ergonomic it is (consider the very short travel of the famous Thinkpad keyboards of the IBM-age, and compare to the long travel of an old mechanical typewriter), you can start focusing on the main problem; the lack of lateral (not vertical!) physical feedback.

The point is that lateral physical feedback is really easy to do! Just paint a grid of silicone squares or make a grid of dots or bulges, and you are done! It can even be thinner than a traditional physical keyboard, since there is no need for the space for keys to move in, and since finger tips are incredibly sensitive, an overlay can be very, very thin. The problem is of course that silicone isn't virtual. However, if you come to terms with having a keyboard without vertical travel, then a dedicated keyboard would let you have a permanent physical overlay, and at the same time avoid stealing your screen space. That is when it becomes really appealing to me!

Full disclosure: I am on Dirkvl's waiting list for a qwerty-OH. But even if I am fully satisfied with the qwerty-OH, I believe I would still buy a dedicated touch keyboard if someone were able to make it.