Doesn't ARC have even more useability flaws than the Wiimote?
People complain about waggle, and how tiring it is to repetitively perform motion with the Wiimote, but in general use it can be rested on the knee for pointing style games. This is because the camera is in the controller and a small change in angle nets a large change in perspective.
The Arc is different, as it has the camera outside of the controller you'd have to make large movements of your hand for typical motion/pointing controls which are comparable to the Wiimote. You can't just rest your hand and you can't leave the pointer centred to the middle of the screen for aiming etc because that would be tiring.
So how can you play for an hour of say Resident Evil 5 (Arc) if you cannot keep your arm at rest like you can with the Wiimote or a traditional controller? If its even more tiring to use than the Wiimote then its even less suited for core games and even more suited to casual short pick up and play style games.
I think it depends on the software (mostly the application/game) whether they want to magnify the input.
The hardware is capable of 1-to-1 true mapping (or whatever they call it), but it doesn't mean the software has to use it "as is".