The eyes still have it. Or it still has the eyes, at any rate. The latest iteration of Valve's Steam Controller has wings its way to GDC, so hopefully one of the RPS attendees will be able to lay hands on it over the next few days. In the meantime, I can bring you a picture, released by Valve, that is in no way exclusive to this site and doesn't even contain hilariously photoshopped owl ears. Instead, it shows a controller that has lost a couple of its odder features as expected, including the fondlescreen and awkwardly positioned buttons. There are now eight buttons, positioned in patterns and placements that will be familiar to anyone who has ever seen a joypad.
I fiddled with a Steam Controller very briefly at the Paradox Convention earlier this year. The pads (in that iteration) worked well when controlling a cursor in EUIV - something that I reckon might be uncomfortable with sticks. I didn't try Team Fortress 2, which was also installed on the machine, but most people I spoke to were less convinced by the application of the pads there, even though they reckoned the haptic feedback might simply require an adjustment of expectations.
The current design, in the pic at the top, looks far more like something that I'd actually use but that's also because it's far closer in layout to controllers I already own. Lack of sticks aside, it's a much more traditional design. I worry about the D-Pad too (yes, these are the things I worry about despite the state of the world) but that's mostly because it doesn't actually look like a D-Pad. Are diagonal inputs possible on that thing? Is there a connection between the buttons at all, somewhere under the shell? It doesn't look like it but it's possible that the image is slightly misleading in that respect. The curve of the surface makes the arrow buttons seem like entirely separate entities from one another though.
This may not be the final design. I expect Valve will take feedback on board, switch things around a little more, and come back with something like this.