MS made the virtual keys available since WP8.1 Update 1, they are purposely trying to help the Android phone vendors to adopt Windows ROM without worrying about the hardware keys. Virtual keys are completely programmable. HTC M8 is an example. They can easily convert their existing flagships to Windows by installing a Windows ROM and some programming tweaks. Now the Xiami Mi4 is experimenting with the W10M by just loading up the W10M firmware.
It will probably also help the Android app publishers to facilitate porting their apps over to W10M via the Project Astoria. So going virtual on-screen keys is actually a strategic move for MS. It is a necessary evil that MS has to adapt in order to expand the WP market share as well as the W10M apps. If the Xiami Mi4 program can be proved viable, it will open up abundant opportunities for MS to work on other Android vendors. Android phone owner can choose to load up W10M firmware to become a W10M phone at anytime without changing phone or carrier contract.
It would help penetrating the Android dominated market like China. Of course, W10 and W10M have to prove themselves that they are worthy.