I don't know why I didn't think of this earlier but as I was reading and thinking about force touch eventually joining the iPhone line up I realized that apple could easily one implement the force touch screen as a home button. Completely relinquishing the need for a physical button. Force touch can do everything a home button can aside from the Touch ID. But we know apple is working towards a Touch ID beneath the screen. This will be something many years from now but still! How exciting!
Tactile feedback is useful when the degree of force is a determining factor, which is why Apple's making a big deal over the Taptic Engine in the watch and new trackpads. If the entire display was capable of providing that feedback, Force Touch is just the tip of the iceberg. Tactile feedback when typing, simulating textures for various reasons... those will be the headline stories when full-screen tactile is available.
One thing Force Touch may not do well is a hard reset (hold power and home buttons until Apple logo appears). The use of mechanical switches for both power and home means the system can be reset/restarted without the device having "higher brain function." A system dependent upon a functioning display assembly reduces the number of states the device can be in and still be reset-capable. (The two-button reset is a kind of fail-safe, to be sure a casual button press doesn't reset the device.)
Also, the home button is a wake-from-sleep. Integrating wake-from-sleep into the display is an invitation to battery drain, both for accidental "wakes" and needing to keep the display in a higher state during sleep.
Now, there are undoubtedly ways around these issues, and no doubt Apple's solutions would be far more elegant than any I could cook up, but they're not trivial matters to overcome at a comparable cost.