This seems like such a simple idea, but I have yet to see it ever implemented and am curious as to whether or not it exists. Since smartphones such as the Galaxy S3 now are rather powerful, would it not be possible to simply connect them to a wireless Bluetooth touch screen display and, from this, effectively use them as a tablet?

You wouldn't want to use bluetooth, but: http://www.engadget.com/2012/06/12/asus-padfone-review/

For some reason, I find the fact that they spell it PadFone with an 'F' quite unsettling...

That is cool, but I am talking without buying an entirely new device. Besides, if I remember rightly, the Asus doesn't have the best specification. I just think it would be cool to use your S3, for example, as a tablet. It sure is powerful enough and it would mean that you wouldn't have to configure every device to your liking.

There's a lot that has to go on behind the scenes on the phone to make it actually work, so without having a phone designed for it, it wouldn't be good.