The Kryoflux would be a great floppy controller as long as it was paired with an on board processor that could emulate the actual drive after the Kyroflux read the entire disk into it's onboard memory.
You would want it too look like this:
Computer --> ARM(floppy emlator) --> cache memory --> Kryoflux
Then you could read any media on any system. You would have a single target environment for writing the computer interfaces leading to better code re-use as well as better cross platform compatibility of the disks. If a secondary interface to the ARM could be added that would let the Kryoflux immages to be read and written to the cache memory, it would be even better, as then you could choose whether the image ever touches the physical disk again or not.
Other than possible cost, the only drawback would be that since the entire disk image would be cached, there would be a wait before a physical disk that has been updated gets written to the physical disk.
With a little forethought, there could also be an interface written into the Arm code to mount not only the disk image in the cache memory, but also the cache as a drive itself. This way, the images could easily be loaded and unloaded from within the emulated environment itself.
While an overlay menu for mounting disks would be cool, and is necessary for games that take over the system as well as single tasking systems, for OS level stuff on multi-tasking systems, being able to mount the floppies in the actual floppy drive would be even cooler.