To the OP:
Tell me, how much of the background wallpaper do you see in the iPad? A lot of it because the icons are small and are spread apart. Hence, it makes sense to have a wallpaper.
On the iPhone, a filled screen or even 3/4 filled with apps takes up 70% of the screen. You would only see 30% of the wallpaper through cracks in between Apps and border of the iPhone OS. It would be asinine - probably why Apple hasn't offered the option yet.
Understood. I know people that jailbroke their iPhone so that they could apply a custom background. I for one never have. Photos aren't the only thing you could use as a background. I'm thinking maybe textures that would blend in with the icons, better than a photo. If they added drop shadows to the icons, that would provide a little more contrast and effect. Just some ideas. I don't care too much about backgrounds. Just bringing it up for discussion.