@Joshua Parker - That's a good question, and I've been a little surprised not to have heard any responses along those lines.

However, I have a couple preemptive points:

1) I think it would be a mistake for WordPress to create a front end interface that acts as a crutch for the back end. One concern I have about front end editing is that it creates two editing interfaces to build, maintain, and perfect. Why not focus on one and make it amazing?

2) As I wrote in the article linked in this post, I think front end editing techniques tend to hinder the development of a solid mental model of how a site's component parts come together to build the site in a way the back end doesn't. Front end editing makes it easier to be a lite user and harder to be a power user.