Yes but when your phone does get scratched or have any cosmetic marks it reduces the resell value of the device. Also, it gives an unpleasant aesthetic look.
One does occasionally find a person that buys a phone with plans to keep it for its natural life
I've had my 4 since launch day, and it has a smattering of tiny hairline scratches on the back, nothing on the camera lens, and nothing on the screen. I scoop a little clod of dust out of the dock connector every month or so, but other than that, the little bugger's in really great shape. No case, no protectors, just using it like a regular phone.
Incidentally, this is my second iPhone - I upgraded to it from my 4GB 2G that I got back in 2007. Nearly three years that little guy lasted me with no case. It had its share of little scratches, the plastic bottom of the back had been polished smooth by my pocket, and it had a couple of little spots where I had dropped it a few times, but it too still looks pretty good for three years of being toted around and used.
It's always the first scratch that hurts a bit, the thing that ruins the 'perfection' of the device. After that though, you don't feel so bad about the subsequent ones. And really, with a device like the iPhone, it's made to be touched, to be felt, and to feel *good* in your hand. Putting cases, covers, and protectors on it takes away that feeling. It always seemed a little silly to protect the feel of a device like that by never touching it.