I'm going to go out on a limb and guess that no human being on this earth has worked in front of an iPhone screen for 8 hours a day for the past year. You know why? Not because it's insufficient resolution, but because it's physically way too small.
Each of your rather vague assertions, assumptions, and attempts to exclude iPhone4's status of 'computer,' has been effectively rebutted.
In accordance:
"Ya, the screen is way too small..."
It doesn't care about absolute technical specifications, agreed - rather the opportunity to do what it wants (which depends on expectations which depends somewhat on marketing). This implies that the processor and interface must deliver a certain perceived quality/performance.
The A8 1GHz processor, with 512MB RAM, and High-Res display, are more than sufficient.
Being that an iPhone is capable of, with admirable speed, no less:
Surfing the web
Reading, writing, editing email
Downloading, streaming, and watching movies
Word Processing
File Databasing
Creating Presentations
Building Spreadsheets
Editing HD video
Wireless Printing
Drawing
Rendering 3D Graphics
Rendering 3D Games
Rendering pages for virtual books
Running apps for controlling other computers and devices
Application switching and multi-tasking
Writing and running web apps using Javascript
BT, Wi-Fi, interfacing with peripherals
USB connection via adapter
Much, much more.......
The iPhone, despite your imposed parameters, is, undeniably, a computer.
In case anyone wants to continue this silly debate on whether X is a computer, it's now underway in
this news topic.
Affirmative, it is.