I think it's pretty obvious that the answer to this, as well as many other questions about the iPhone, is that the device is still very much unfinished.
The interface is so polished that it seems like many people can't see this fact, even though it's staring you right in the face. Yes, the core functions work pretty well, and worked pretty well on launch day. But the 1.0 release had major missing features; simple things like TV Out. And people found that certain combinations of letters were impossible to type -- whoops! Safari crashed a whole lot (way more than it does now). Even the camera was shakier and blurrier back then.
A few months later there are still big holes. Safari still crashes too much. There's no option for text message alerts to keep beeping periodically in case you miss the first one. The keyboard can't be turned sideways in most apps. Once you pull up the keyboard in the SMS client, you can't make it go away without backing out of the whole conversation. There's still no Disk Mode, no cut/paste, no Flash, no Exchange support. Every iPhone owner has a long list in their head of improvements that they'd like to see.
This is all consistent with the development history. Apple pulled people off the Leopard development team -- delaying Leopard -- to pull the iPhone across the "shippable" line. So it's not surprising that any feature which wasn't working in time for release was simply cut for the time being. And now all those people are back on Leopard, so iPhone development is moving more slowly than we might like. Leopard will ship soon, though, and that should free up some developers to work on the iPhone again.
So all the people clamoring for MMS, or Exchange, or Flash, or third-party apps, should be a little more patient. The iPhone is a very long-term project for Apple, and all of these concerns will be addressed. I think we should be glad that the iPhone team is taking the time needed to get these things done right. The iPhone was obviously rushed out the door a little, but it's already a tremendously useful device. If they can add in some features while maintaining the quality they've shown so far, we will all come out for the better.
