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Here's why. The specs of the iPhone might be nice but the lack of control just kills it. I mean I don't want my screen to have on-screen controls and take up precious space for the beautiful game. Plus putting your fingers on the screen just kills the whole meaning of a video game, the fact that you are looking at it and constantly sticking your finger in front of it just blows.
Like that 3D space shooter you showed Xenc, where he was shooting by clicking anywhere, yeah, that worked REAL well. You can't see anything when you do it.
The iPhone will be nice for quirky and "innovative" games but that's about it as far as I'm concerned.