I thought exactly the same thing. I have never used touchbuddy because I dont have a touch screen and I already have a 3 screen gaming set up so no room for another anyway.
Here is my attempt using graphics from WBK's il2 profile. Right now you supply the graphics and an XML file describing all the locations and what the buttons do. The iphone/ipad/ipod (this will work on all of them) talks to another program I have written which converts the command you associated with the button to something else, generally a keyboard key, macro or possibly a plugin.
Here are a couple youtube vids showing it. The first has a basic screen showing the interaction with the computer and the second is a bit closer on the iphone. With the ipad there will be a lot more real estate, more then the average 7 or 8" screen people are using.
YouTube - P1000917.MOV
YouTube - P1000919.MOV