I think it was a major screw-up in the ICS Android UI. If there is no menu button, and the app is not ICS friendly, they really should have given the user another optional setting of some sort that did not involve robbing the screen.
The perfect proposed solution: Change the "recently used apps" button into a menu button, and move the recently used function to be long-press on the home button. Choices are good. I am hoping this idea might be possible at some point without totally ripping out the ROM.
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I hate the on-screen menu button, but I disagree with most of this. I think android "had" to move away from having a menu button, because an always present physical menu button means that visual menus are not always present until called upon, and this limits usability for users who are not tech-savvy. I think of the physical menu button as being similar to a right click on a computer, and I can't tell you how many people I know never think to right click things when they need more options.
This move was to make android more usable, force apps to be redesigned more for visual cohesion and ease of use, and make the phone appear more user-friendly. Having back, home, and multitask are easily recognizable and not overwhelming. And while multitasking on "this" phone is somewhat broken, I find using multitasking to be waaaaaay more intuitive, fast, and pleasant when it's a simple press away, as opposed to a few second hold and then responding to an on-screen menu. This change helps streamline things for androids future, and helps make it more open to new users. It just will take time to get all developers on board with new apps, but it's for the best once they do. Samsung including the legacy menu button is really not helping things though. The popularity of the GS3 could really push this whole movement back, which is really discouraging.
I would, however, totally be down with having the option to just turn it off completely at the user's request. I have not encountered a single app where the on-screen menu button led to something that you could not access ANYWHERE else within the app. Not to mention in most games, the button does absolutely nothing because options are all handled through the on-screen pause or settings button.