edit: also 1v1 dueling is all they are proposing that will be fun for about 10 minutes ;)
That is the first step. And even 1 vs 1 duelling in Warband is really interesting to me and so much others. I have duelled so many hours, trying to get better at this combat system. Now imagine a combat system with full freedom of movement. Where parrying is done by bringing your controller in the way of the blade that you see incoming. Where you can pommel someone in the face. The depth of such a system is not even comparable to pvkii or even Warband.
Fully immersive, 1 to 1 controlled swordfighting would better than anything I have ever played. If you really think what this guy is talking about is comparable to playing Zelda on the Wii than you must have completely misunderstood the video.
If they pull this off it would be such a step forward in the gaming industry. Motion controlled gaming has such enormous potential but what the big companies manage to pull out of it is just depressing. Both the Kinect and Move and Wii are so severly flawed for hardcore gaming.
Too bad I am very skeptical of them pulling it off properly and if they will I'm afraid for the pricetag. I'd rather have it expensive and good though than cheap and mediocre. If they make what I hope it will be they deserve hundreds of euros.