Personally I have found some pieces that I can only learn in this way. Bach fugues are an example. I think people might have a hard time to understand the above until they have tried it with complex music.
Hello everybody, long time no see. I've been out with the flu.
Being away from the piano for the last week or so, I learned Beethoven's sonata #25 (opus 79) this way, without even touching the keyboard. This is one of the easier sonatas to be sure; however, I was surprised to have made such progress while laying in bed.
Complexity is definitely an issue. This is nothing new to piano playing. Learning completely sans instrument can be categorized as an aural/visual skill. We know that these skills can and should be practiced, therefore improved gradually from the easy to the advanced. I encourage everyone to practice at least a quarter of one's total practice time away from the bench.
At this point, I have difficulty learning pieces on par with or more difficult than Beethoven's Waldstein this way. At a certain level, my brain just can't visualize any more musical texture without actually hitting the keys. When I began to practice this skill, (five years ago) my 'free visualization limit' (that's what I call it) was Clementi Sonatinas. So, I've certainly improved and continue to get better at it with practice.
The real value of it is shown during performance. If I properly visualize during the learning process, performances become VERY reliable and consistently more musical.
My advice to someone who hasn't yet practiced in this way is, start with simple music and always gradually trend toward the more advanced. Practice consistently.