The use of a sticky key code can allow for character combinations. Uppercase and lowercase could be handled either contextually by the computer or through a modified capslock/shift combo code. For caps lock we use sticky key code + shift code, for shift key we use shift code (which by the nature of it's intended use should be defaulted to sticky)
I can imagine now, people everywhere absent mindedly tapping out emails and writing down notes while walking down the street. The additional benefit of only needing to learn a few additional modified codes if you already know Morse Code (and *who* doesn't know Morse Code?) allows for users to adapt quickly to the interface as well as learn a useful (if albeit slightly modified) standard already in place.
The Ghost of Samuel Morse looks kindly upon thee...