But there is a lot interaction design going with physical interfaces, not to mention the digital interfaces with physical inputs or digital inputs that control physical actions, so limiting it to "on the glass" is not quite right. It goes beyond the GUI. Part of the issue is that interaction design is a task that is associated with the design of anything, and industrial designers practice interaction design every day.
Think of the interface in a vehicle... not the one on the 6"x9" screen, the one that actually controls the conveyance. Designing the steering wheel, the shifter, the pedals, the assorted switch gear that control any numb of function, that is all a part of interaction design. It has been so standardized that we don't think about it anymore, but when you get in a rental with oddly placed headlamp switch beer, or a hard to use wiper stalk, the importance becomes more evident again. Especially if you are in that rental, going 80MPH down the freeway and the sun goes down and it starts to rain!
My favorite example of poorly integrated physical/digital interfaces are the ATM machine and the Self Check out at the grocery store. Here we have two pretty amazing interfaces in terms of the service they provide. I can fly anywhere in the world with nothing in my pocket, land in Hong Kong, pop over to the ATM and take out money in at the local currency from my bank account. Amazing. Yet the experience and interface are so poor, with such slip shod integration between the tiny screen, a limited array of hard keys, and the card input, money output slots that the whole thing feels sub par.
The self check out is even worse. Instead of a single experience, we have a collection of off the shelf parts that someone has tried to marry together...