Have any of you actually tried gaming on Android? There are a whole bunch of controller-enabled games on Google Play right now. You can hook up a USB controller, use Bluetooth, use a controller designed specifically for Android or not. There are even controllers for Android that have built-in phone holders, and things that mate controllers with phones. And there are phones with built-in controllers such as the Xperia PLAY.
This is a hot area and NVIDIA is jumping on it. Maybe it'll work out, maybe not, but this isn't some crazy thing out of nowhere. People have been doing it for a while and Android is only going to get more and more powerful. Already gaming on a Nexus 7 (Tegra 3) is pretty impressive, especially for a $200-250 multi-purpose device.
Then there is the OUYA which is going to promote controller-enabled games for Android.