Cool idea, but it won't work. The changing keyboard scheme means that you'll need software support for each game (much like Logitech's G15 and G17 LCDs), and I'll bet the list of supported games will be fairly short. WoW and WC3 (DotA) both look like they're on there already, so they have a decent start at least. The small screen and cramped keyboard will also be less than ideal for anything other than a quick WoW session on the fly, for those that truly can't bear to be apart from the game for more than a few hours.
Beyond that, desktops are great for gaming for two primary reasons. First, you can pack a ton of power into them. You don't have to worry about space, heat, or power limitations that even 17"+ monster laptops have to consider. Second, they're easily upgradeable. My Envy 14's HD 5650, for example, will eventually be too slow to run modern games even on medium or low settings. My desktop's GTX 285 will eventually be left in the dust as well, but at least that one I can swap out for $300 or so without having to replace the entire system.
Essentially, what does this offer that something like the Alienware M11x doesn't? There are even cheaper ultraportable options with discrete graphics cards as well.