Remember that this guy played with the controller for a long time and his job is to make it look like as good as possible.
So yeah, the controller seems ABSOLUTELY fine for a controller (and probably more precise in some cases than a "regular" controller), but please, let's not fool ourselves, this is NOT a PC gaming experience - i.e. this is very far from the level of control a MOUSE provides.
It's better than any other couch-options, but the controls in Civ still looked frustrating instead of fun.
For example, my macbook track pad takes velocity into account. Something like that could make a big difference for covering large distances. I'm withholding judgment until I try one.
But then I play FPS with a trackball now, so it doesn't seem so alien to me.
I.e., if I move my finger across the whole steam controller right pad, then the sensitivity should be high enough to move across the whole screen in that motion while still allowing enough accuracy to click where I want.
Who really thought Valve making a controller would make an unusable one? This was never a concern. The concern here is that it might work well with FPS, RTS etc... (or good enough)... but might not work as good as button based controllers for other genres.
However, playing a FPS on anything but a Oculus Rift or equivalent is going to feel quaint in a few months.
If by ratcheting you mean the repeated movements to look around, that is very similar to moving a mouse with a low sensitivity settings.
It's intended to take the gaming pc (and by, extension steam) out of the man-cave and into the living room to compete with consoles. This requires providing people with an ability for people to play FPS and RTS decently with a controller, rather than a mouse, or they are going to stick with their man caves and mice.
Also I guess difficulty in singleplayer games would have to take the control scheme into account.
I still want to see a platformer and a fighting game since the best mapping is a little unclear. (Though these a) won't be showstoppers and b) are likely to be workable.) Humans are adaptable and if this controller is reasonably usable in all the main gaming genres then very quickly you'll see people get really, really good at using it.