To be fair, the original iPhone was fairly hobbled.
No multitasking. EDGE only. Heck, when it came out, you couldn't even install apps yet.
At the time, my Treo 650 was actually still more useful because I could install apps for a lot of the things I needed.
When apps became available, I started paying more attention, but the lack of multitasking was still a turn-off.
For me, the iPhone didn't become a "must buy" until the iPhone 4 and iOS 4, when multitasking debuted. It finally stopped being a toy and actually became truly useful.