Practicality aside, it will soon be a reality. Razer, Sixense and Valve have signed a multi-year agreement with the intention of creating "...revolutionary true-to-life, next-generation motion sensing and gesture recognition controller for PC gaming." They claim it will be ultra-precise, with one-to-one movements on all six axes and positional accuracy down to a single millimetre. Video after the jump...
The technology is being demonstrated at CES this week using Left 4 Dead 2, however I think it's safe to assume their progress is still in its infancy, as physical movement versus on-screen response most certainly wasn't one-to-one. There is no release date, but we can expect the hardware to be compatible with all current and future generation PC games.
[Video: http://www.viddler.com/explore/GUreel/videos/4/]