All the arguments here basically boil down to two things:
1: pressing an individual key vice making a whole gesture movement per letter
2: time and hassle learning a new way to enter information (keyboard)
The first one is a bit of a draw, as there is still some time spent finding the correct letter (now on smaller screens), although many typists can type without really hunting and pecking, and know their keyboards very well. It still doesn't account for errors. On many mobile devices the keyboard is so cramped that even if you are correct, fingers are big enough errors often happen.
The second argument is the biggest reason why most don't want it: they are just too used to the qwerty layout and would rather not bother taking the extra time to learn a new layout.
Regardless of what people whine about here, this gesture method DOES elminate error correcting to a certain extent. There are errors in which someone can swipe 92 degrees instead of 90 and end up gesturing up the wrong letter, but with a +/- 45 degree "error" band, its fairly minimal.
However the first argument can be a large detraction from this method. One reason I never bothered learning to gesture letters (can be error prone, too) on Palm Pilots is that gesturing for EVERY SINGLE LETTER can be time consuming, tiring and can get really annoying, especially if you're trying to send a long message. I can see this producing short "txt" style messages like the early days of texting on a flip/candybar feature phone.
As someone has said, its still only a stopgap before voice recognition reaches a golden point of just being on the device naturally. Voice dialing on my phone is a snap, and doing Google maps searches is dang near error free. Once voice recognition comes into play, touching your phone at all becomes obsolete anyway.