It's WAI. The mouse targeting determines your "base" position; the keyboard input determines your position relative to your "base" position, as determined by your targeting reticule. Using the mouse to aim and your keyboard to move around (most often, I just do big circles) allows you to maintain fire on a target while still avoiding incoming fire. It's not really needed for the non-heroic missions, but, on the heroic missions it's pretty much required: if you're not moving while there are enemies on the screen, you're taking a lot of damage that you're supposed avoid through dodging, and, if you're not focusing blaster and missile fire on you enemies, you're not going to take enough of them out to finish.
Wow...I had no idea you could do that. I just use my mouse and proper timing of shield regen vs. blaster boost. I'll have to try this, but usually I do just fine using only a mouse.