Well BIS devs already mentioned that this Take On Helicopters sim will be based on a considerably MODIFIED engine of ArmA3 (yes, based on ArmA3 which as we all know it wasn't released yet). The "modified part" of the engine is definitly because of features needed to realistically model helicopters - Since there's no need to model infantry or even perhaps ground vehicles, things like helicopter flight model/physics can be vastly improved without taking up to many PC resources (a thing that would almost certainly happen with ArmA)!
I think we should wait and see how this Take On Helicopters sim will be in the end but saying that Take On Helicopters will not be good because it's based on ArmA engine is just plain wrong because any engine can be modified to do whatever the programmers what it to do (and even more effectivelly if the programmers are ones that made the engine, which is the case).
Take an example: look at Combat-Helo project a sim that's being developed using an engine called "Leadwerks" which is an engine that was designed for FPS game but it's being used to develop a realistic helo sim. It's true that COmbat-Helo wasn't released yet but from what I've seen so far the devs of this sim are doing a great job and this with an engine that wasn't designed for helicopter sims!
By the way, I totally and completly disagree with you Johncage when you say that the ArmA engine as a flight sim is "worse for helicopters" - IMO, helicopter are FAR BETTER modeled in ArmA than for example fixed-wing aircraft (these ones yes, are crap) or any other vehicles (such as cars, tanks, boats, etc...) for that matter and IMO the helicopter flight model in ArmA is not that bad, I find it rather good and even better than some dedicated helicopter flight sim and games that I played in past such as the Comanche series (1, 2, 3 and 4) and Gunship! Is the ArmA helicopter flight model perfect? NO! Does it need improvements to be more realistic? definitly YES! But nevertheless the helicopter flight model in ArmA is far better than arcade (or the ones seen in arcade helicopter games) and is definitly nearer to simulation that arcade.
Resuming, I'm following this Take on Helicopters sim/project with a very high level of interest and I do have high hopes for this sim but of course I hope not to be wrong...