I was expecting a new refresh with a better processor, larger SSD, and keeping everything else the same. But Apple seems to forget the good parts,
If by "the good parts" you mean "a better processor", I've seen rumors that it'll have a SomethingLake processor, which I presume counts as "better". (I suppose I could be less lazy and find out whether "SomethingLake" is "Skylake" or "Kaby Lake".) I don't know whether the maximum SSD size will be > 16GB, but I wouldn't be surprised. (More main memory would probably help as well.)
If rumors are true, it will remove full size USB ports,
Probably. (Some rumors claim they'll do a MagSafed version, which would be nice when it's used as a power connector.) Hopefully there will be more than one; having only one would suck if it means "you need an add-on hub if you want to use more than one USB device at a time or use a USB device when it's plugged into the power supply".
along with the headset jack,
Courage! Just don't be bitter about it.
replace the physical keyboard with a touch abomination,
Replace the entire keyboard? Not according to any rumor I've seen, and not according to the pictures in TFA, although it might use the same key mechanism as the one the current MacBook does.
Replace the function key row? Yes, that's the rumor this article is talking about. As long as I can hit a key (whether labeled "Esc" or "esc" or "Cancel") on the touch bar as conveniently as I can hit the esc key on my current MBP's keyboard, that'd work for me, although others might find it more of a pain than the current keyboard if they use function keys a lot.
and turn it into a "not so tablet" experience. If I wanted to use a tablet, we also have a Surface Pro, and it works well. However writing code, editing documents require a simple device, which happened to be my current MBP.