The smartphone is now an integral part of many people's lives. In some ways, it's even more vital than a laptop in the role it plays. I have no doubt that for many people, $1000+ is a fair price for the utility the iPhone will offer them.
So is the umbrella and the toast. I will not buy slightly updated $999 umbrellas or $999 toasts. I will find a sub $750 phone to call, text, use a few apps, snap some pics and push the super complex A.X.X processor to its limits with a crossword puzzle at the airport. In no way is the $1000+ price justified.