Their design includes a trusted server, which should NOT be necessary for bitcoins.
Well, when you can design a credit-card sized device that can hold and process the entire Bitcoin blockchain, you let us know!
That is not necessary, a smartcard just needs to sign transactions and updating the future multi-gig blockchain on that vapor devices connection is not gonna happen anyway.
Plus the smartphone will be the platform of the future. Android smartphones are now as cheap as $149 on prepaid plan without contract and there are prepaid plans as cheap as $30 per month.
Things like Google wallet & NFC are going to be the next killer app (NFC is useful for more than just payments it can replace membership cards, loyalty cards, metro cards, basically every piece of plastic in your wallet).
I love my SamSung Galaxy Nexus. Google gives you $10 free to put on a prepaid "card" in the wallet. I bought a soda & hotdog from 7-11 by tapping my phone. Pretty cool tech that just works. This will get people use to the idea of digital "money" and the smartphone as the payment platform.
While Google may never support Bitcoin other apps can use NFC hardware. If 7-11 wanted to accept Bitcoins tomorrow the hardware is already in place in their 30,000 stores. All they need is the backend software to process, verify, and route a signed Bitcoin tx received by NFC.
NFC & Smartphones will be gateway to mass usage of Bitcoin. NFC can also be used point to point. Say your friend owes you $10. You make a payment request for 2 BTC (pretty much 2 or 3 clicks in a smartphone wallet app). You tap your phone against his. He gets the payment request his wallet app opens up showing the amount, note, address. He enters his pin and your get a the 0-confirm notification in seconds.