I was also quite confused about why they would choose a projector over a second screen, actually it was the most nagging question until, watching the intro video, someone projects a graphic onto a physical sheet of paper, so I suppose the immediate interaction between projection and physical objects is the main reasoning behind it.

In a two screen scenario, I suppose the user would have to image the paper, then composite it digitally. It's an interesting approach although I wonder how often it would be used.