It will never work as good as a mechanical since it's completely reactionary. Secondly, a LSD is shifting power, while the software approach is limiting power. However, if this is just on non-M cars, I don't think the general populous cares.
I beg to differ, I believe this will work as good or even better than a mechanical LSD.
power follows the path of least resistance
so in an open diff, when one wheel looses traction, that wheel spins freely, all the power goes to that one wheel, even if the other wheel is on solid ground, it doesn't spin.
in a Limited Slip Diff, the diff allows a small degree of speed differential between the 2 wheels to account for turning; the diff locks up once that limit is exceeded, thus force both wheels to turn at the same rate.
with brake assisted/virtual diff, traction control applies braking to the wheel that's slipped, thus forcing all of the power to the other wheel.
with an electronic system, you are able to dynamically control the degree of slip allowed and the amount of power transferred.
This is actually F1 tech, the new McLaren MP4 doesn't use an LSD.
If they can get the software calibrated, this will be better and cheaper than mechanical systems.