That form factor is fine, although not popular with consumers. I had a Droid 2 for a while, and found myself using the soft-keyboard more and more, particularly while not using connectbot.
I had one of the first generation Droids, and much preferred that form factor to any later smart phone I had, largely because of easy access to keys normally hidden behind layers of menu.
The problems I had with it were primarily related to build-quality I think. The 'i' key wore out after several months for example. I think these problems could likely be fixed by not skimping on the parts, but who knows.
That form factor is fine, although not popular with consumers. I had a Droid 2 for a while, and found myself using the soft-keyboard more and more, particularly while not using connectbot.