You obviously havent bothered to read any of my posts where I state I currently game on a 110" screen on a projector in a fully darkened screen.
The controller light doesnt affect all the image on screen - at all.
It reduces jagged edges and shimmering of pixels while you're in motion. Basically makes the image much more stable and life-like. It's still much softer at 720p than 1080p, but it looks better than rendering directly at 720p.
Basically it means that people who only have 720p TVs are still getting some benefit from the fact that the games are native 1080p.