Yea, the cost is a bit high, but it has it's own processor to handle all of the graphics processing separately. While it's not an Arduino per se, it has an ATmega 2560 on board. Compared to the 382 that gives you 8* the flash, and 4* the eprom and sram. I'd guess that it's pretty snappy as a ui, since you're not doing any of the graphics work on the Arduino.
You may want to think about something like a older Win Mobile Phone / PDA for the touch / output portion of the job. You can probably pick one up on eBay (search ppc 6700) for relatively little money compared to what you get, and you could use Bluetooth to communicate via the com port.
I haven't actually gotten to the point of controlling the Arduino yet, but I have written a .NET app that sits on my Win Mobil phone and can display the GPS output my Arduino is sending via Serial Bluetooth. From a control and communication standpoint, anything that can be done on a PC via a serial port could be done on my phone.