I don't know if there's any way around this (and I don't see it as much of a problem at all, TBH) but it looks like PA is still looking for a BT keyboard input when the iCade is switched off, so when it can't see it, it switches to the in-built iOS keyboard. Might not be something that needs to be fixed, but definitely something to be aware of.
Edit: Okay, and it looks like if you enable iCade and restart without having anything connected, it comes up with the keyboard all the time as well. Like I said, no fuss but something to keep an eye out for.
Ok now if you have an iPhone and accidentally get stuck with the keyboard constantly displayed how can you turn it off? The keyboard blocks the options button.