The setup they were playing with is far from practical, but it was primarily to play with the concept and see what kinds of results and interactions there were.
Imagine that instead of playing in the dark, with a digital projector throwing images onto cardboard pieces, with a lagging computer struggling to keep up with their movements, that the demonstration was instead a bunch of independently, yet networked LCD tiles played on a tabletop computer screen.
Heck we can even scale it back to something more here and now and imagine a multi-player miniatures game where everyone just uses an iPhone as their game piece.