I don't even understand why there is a debate here. It's never going to be as good as a DSLR or have the high-end features found on other cameras, but it's impressive for a phone. And photographers shouldn't knock it just because it's not as good.
It is better than DSLR when the only thing you have on you is your phone.
And that's exactly the point and the advantage of having a great camera on a phone.
It's always on you. You are not going to be carrying a DSLR everywhere with you, and a P&S is smaller but it is still another device to carry.
Phones have changed A LOT! In the last couple of years, mobile phones are the focus of the IT industry now, the field to be in, much like laptops were before and desktops were years ago.
iPhone revolutionized the phones industry and marked the time when serious players, players who have revolutionized the computer industry entered the game.
Before that Nokia N95 was the revolutionary, high end device that really pushed the technological limits, iPhone though, completely changed the game, it lacked in features compared to the N95 the first couple of years but it completely changed the paradigm.
A modern smartphone has killed a lot of other devices for average people, GPS, Camera, etc... both in features and in convenience, again, a dedicated GPS unit is not always on you...
I like that Apple focused the industry on camera quality in terms lenses, sensors, etc... instead of just megapixels. People took notice, other manufacturers took notice too. The camera wars have been dying for a while, just upping megapixels and that's it, until Apple reignited it again.
