I admire the effort but I don't think Apple will (or should) go for it. iOS is a direct manipulation interface. Swiping over the keyboard to move the cursor around another part of the screen is really counter to that.
What would make more sense is to add faster direct manipulation gestures. There's opportunity for that, without throwing out the whole paradigm.
For example, today to select a range of text you:
1. Tap-and-hold to bring up the cursor magnifying glass
2. Let go to bring up the context menu
3. Tap "select" from the menu
4. Drag one of the endpoints to one end of the selection
5. Adjust the other endpoint if necessary
But why not this?
1. Tap-and-hold to bring up the cursor magnifying glass
2. While holding, use a second finger to drag out the desired selection!
The keyboard is already breaking the direct manipulation paradigm -- you type at the bottom of the screen and text appears somewhere else. This feature is useful exactly because it's not direct manipulation. You are typing text; being able to control the cursor while doing that is brilliant. Tapping the screen is pretty much equivalent to, on the desktop, taking your hands off the keyboard and using the mouse.
I don't have an iPad but I do have an iPhone and I've found cursor manipulation to be a very frustrating experience. Trying to manipulate the address bar in Safari, for example, makes me want to pull out my hair. The cursor control just isn't fine enough.
It's sort of nick-picking at this point, but I don't think your point is valid. Sure you press an A and you get an A up where the cursor is. You swipe your finger and you get movement up where the cursor is. It's not really all that different.
It's night-and-day different. I think you confused "direct manipulation" with "nothing can happen elsewhere except where I tap."
Direct manipulation UIs are about interactions that correspond to the physical world. Tapping on a virtual keyboard does exactly that. Swiping your finger across a virtual keyboard makes no sense at all.
Anyway, turns out iOS already had faster text selection gestures and we just didn't know. (See hej's comment.)
A 2-finger solution probably wouldn't work so well on the iPad, and especially not on the iPhone. Consistency across devices is a pattern that Apple clearly follows.
I agree however that the method in the video is not so feasible either, for exactly your reasoning.
Double-tap any text you are editing in order to select a word. That also allows you to drag the endpoints. Tapping with two fingers selects the whole paragraph.
In short: Tapping places the cursor (and brings up the keyboard if it isn’t already up), double-tapping selects a word, tapping with two fingers selects a paragraph. I couldn’t find any other gestures.
If you you double-tap and hold, you can immediately change the selection, but you are anchored to the word you selected (i.e. you can add characters to the left or the right but not both). Tapping and holding with two fingers allows you to change both endpoints with your two fingers.
Web views (and most other views of text you cannot edit) don’t work like that. In those, you tap and hold to select text. It’s a bit inconsistent, though: in iBooks (for example), tapping with two fingers will select whole paragraphs.
Very cool. This would imply there is a superfast method to select a paragraph and extend to two paragraphs: Doubletap with two fingers, then drag up/down. But unfortunately, this doesn't work (it starts scrolling instead). I would hope that Apple implements this as well.
Bizarrely, two fingered tap only seems to work on editable text, not read only. So you cannot use it to select text on a Web page or a received e-mail.
What would make more sense is to add faster direct manipulation gestures. There's opportunity for that, without throwing out the whole paradigm.
For example, today to select a range of text you:
But why not this? Now that's something Apple might actually go for.