As great as the potential of advanced touchscreens may be, for music and other media applications, touchscreens aren’t much fun to touch. Close your eyes and remove visual feedback, and you’re basically running your finger along a piece of plastic. (You’d think we could figure out a way to at least texture it without losing tracking.) Compare that to piano or drums: musical instruments can be played satisfyingly with your eyes closed. Yeah, you can do that to look “deep,” but the point is, you’re relying on tactile, not visual feedback.
Here’s a promising solution: the Hyperfabric project (via the fascinating ramblings at SteamSHIFT). This stuff is strong (it can support body weight), and lets you actually touch, squeeze, grab, and otherwise manipulate a large-scale fabric surface to control computer-generated imagery. It’s certainly workable as a musical instrument, if you want to be able to, in their words, “press your face into the hyperfabric to release fairies.”
I have no idea how this thing works, though I’m guessing some kind of correlation of pressure with video sensing. It’s commercially available, or you can just ponder what giant spiderweb-like surfaces might someday do for music.