Its not that hard to build for a company that has a couple of half-competent engineers.
The design might be patentable, which would provide protection against that kind of quick competition.
If you wanted to get really crazy you could hook up a kinect controller and emulate the real thing

You know, this is actually a great idea. I can imagine the guy with a flashlight (or however they are called) moving like he is fucking the girl, the kinect reading his movements and transpiting them to the webpage so the machine follows the movements of the guy (or girl). It would be like the first step towards internet "real" sex, kind of like virtual reality.
Why not create a corresponding fake vagina with sensors? Rather than control with the mouse, a man could directly control the action with his penis. Seems that would simulate internet sex much better than humping the air in front of a pervy staring Kinect.