I was all with you and completely in agreement until the very last sentence. I'm not sure what you mean by "doesn't pick up physical input". By definition, touching the screen is physical input.
My post (before I read yours) was going to say that it would probably be possible for the screen to read a fingerprint if the resolution on the capacitive detection was much, much higher.
An analog that may be possible with the current hardware would be to create a multi-touch lock app that requires the user to touch with multiple fingers simultaneously in the same pattern each time. Ideally, you wouldn't have to touch in the same PLACE each time, just maintain the pattern (relative spacing of your fingers) regardless of the orientation. (if that makes sense to anyone).
This would be a pretty secure locking method, however it might be a bit tedious to use.
By physical input I mean that the screen does not change shape based on what you touch. A resistive screen for instance has a film over that when you press on it, it deforms registering where the top film made contact with the bottom film. I think with a VERY sensative (more than likely impractical) resistive screen it could be possible (and a coding nightmare since resistive multi touch is more of a hack than a feature).
The point I was making is that with a capacitive touch screen not only would you have to turn the sensing resolution all the way (these things go to 11!) you would also need to turn the capcitive sensativity way down to a point where only a firm pressure would sense to keep it from continuing to detect the valley's because they give off the same electrostatic change. To test this I placed a piece of paper between my droid and my finger and it still continued to pick up my finger even though I wasn't making direct contact (press firmly).
Anyways, I think the current locking is awesome. A simple pattern. The way I remember the pattern is I assign a number to each and use the use the pattern grid as a keypad. Locking a consumer mobile device is simply a deterrent and than a security measure. I would prefer something intuitive and simple and not going to hog resources just to get to the phone.