How are they limited? I'm not trying to rebuttal your thoughts on the stylus coming back, as that's personal preference -- I myself would rather move Link around with the Circle Pad -- but it's an absolute fact that you can do more with a touch screen and stylus than you can with a control pad and buttons, as the DS games showcased very clearly. It's like comparing a standard controller to the Wii MotionPlus. There just aren't as many available options.
You cannot do more with a stylus than you can with control pad and buttons. That's like saying you can do more with a mouse than you can with a keyboard - the notion is absolutely ludicrous. You're limited to basic touches, but you do get a surplus of range to move around with (you can touch anywhere instantly with touchscreen, can't move anywhere instantly with sticks). But, that range is the only advantage that ttouch controls have over buttons. Everything else, buttons outclass the touch.