The design is flawed, therefore causes a defect in its functionality. Unless your phone is designed differently... you have the same problem.
And this is based on your scientific analysis of what exactly? Are you also saying that all other phones that experience signal degradation when held are also defective in design and functionality?
I find it extremely amusing that we have had years of posts about how the AT&T network sucks and there is a huge occurrence of dropped calls and poor call quality but now every single dropped call is now due to the attenuation issue.
I'm not saying there's not a design issue or a problem with the phones themselves, but it is quite a leap to go straight to "all iPhones are defective due to poor design" when clearly if the phone simply didn't work at all there would be huge return lines instead of people still lining up to buy the things.
As I said before, my experience has been that the i4 is a huge improvement in reception and call quality over my 3G. But that is just my experience, and it certainly does not mean that there is no issue at all.