Good START but needs some features
1. Needs zoom-in ability.
2. Needs pencil icon for precise start of draw. The offset is great in that it lets you see what you are doing, but you start marking at the exact moment you find out what the offset distance is. It needs a pencil icon, then when you touch down it could automatically use the distance between your touch and the icon as the offset. That way (1) the offset can be as small as you want and (2) you know where the line will begin. Then at the bottom could be a "pencil up" button. With the pencil up (icon of a pencil with a dot away from the point) your touch just moves it without marking, so you can position it. Then "pencil down" (exactly at the dot) and draw.
3. Orthogonal drawing. The hardest thing to do in a free-drawing app is a straight line. Is there any way to add an "ortho" button, so that moving the pencil draws a straight line from start to end position? (Lift finger to set line in place.) Related: a circle function. Moving the pencil pulls a circle out from the start position at the center. Concentric circles: a "last position" button to pop the pencil point back to the last start position, where you can then pull out another circle concentric to the previous one. Finally, to aid in perspective drawing, a way to select a circle and squash it into an ellipse (maybe a two-finger squeeze or spread, with your fingers supplying both the angle and amount of squeeze/spread). You would not need to put your fingers directly on the circle, once it is selected, it would be only the relative motion of the fingers, no matter where they are, that would modify the circle. Twisting with two fingers to rotate the ellipse around its center. And a button to change the two-finger action to a circle resizer instead of ellipse-maker. For an arc, draw a complete circle and erase the excess (not that hard with zoom). A specialized erase would make this even easier: select points on the circle and erase between the points with a "cut" button. Of course that would require a "point-select" pen. The simpler "draw with white" erase would do if it would keep the app small and simple.
These few features would make this into an unsurpassable drawing app. Id pay money for it, if it was stable.
Since wrote above I found DangoPen, which has some of these features. But it is for iPad only. This app could be almost as useful while being simpler to operate, and can work on iPad and iPhone both. (Im trying to keep sketch notes on a Touch.)
STMRadio about
Drawing Notepad