Wrong. The AT&T is not. The technology is in use since many years at least here in UK not mention Asia.
I just don't understand why iPhone is not with video iChat implemented yet. And so many people waiting for it.
Dropped video calls are probably way more annoying that dropped phone calls. Don't underestimate the AT&T network in places like New York.
iChat has kinda failed because the video feature only works with other iChat users and usually does not work if you're using a router (which most people do) because it's very dumb at networking. It's however fantastic within local networks, where the iSight camera can really shine. Impress your friends with a 4-people conference on an HDTV. (I'm still looking for a compatible USB webcam by the way, PM me if you know one besides the old iSights).
The problem about mobile video calls is that you need a headset if you don't wanna annoy the people around you. The iPhone's speaker is just not loud enough to be used as a phone speaker, but luckily, the typical user got some earbuds around. Video calling, especially in the US, would probably cause more traffic accidents than SMS.
I often opt not to activate video when using Skype because I don't look pretty at that moment or haven't cleaned up the room. The latter can be helped by those video effects that replace the background with something else, but are very sensitive to lighting changes.
AT&T can barely handle normal voice calls, so I would expect the video calls to be very low quality and very high latency, think early 90's era webcam chat. It would work very well in Japan and a few western Europe countries, but the US are Apple's primary market.
Oh, there's one more reason against video chat, even over WIFI: battery life and heat. It's already bad as it is, but when it has to do heavy video encoding and decoding simultaneously, the battery will empty in no time and the device get pretty warm.