I am not one of these people. I think on-screen joysticks and controls have their place and can be used to great effectiveness depending on the application. That generic statement aside, it's absolutely possible to make a joypad on a touch screen work the way you want it, and make a fun game in the process.
I have a few games in the pipeline that will be incorporating onscreen joysticks to play them, which I don't believe will decrease enjoyment while you're playing. The gaming public will be the judge, but I don't see it as being a huge problem when you're looking for an experience that can only be replicated with a bunch of arrows and buttons.