1) Flash on camera phones don't do much if anything unless you are standing less then a foot from the phone, and consumer flash looks like crap anyway, causing faces to be blown out. 2) Don't you mean it has a small aperture? The shutter speed is just fine, but the amount of light it lets in is rather small. Due to the law of reciprocity in photography, the shutter speed must be lowered to compensate for the small aperture to allow more light to be recorded onto the sensor. This was also designed this way to create a greater depth of field since there is no AF and to save on space. 3) Zoom would be nice, but you would be hard pressed to find space for it in that tiny form factor. You could utilize the vertical periscope design of the Sony Cybershot T series cameras for an internal zoom as opposed to using a front element, but this still would require too much physical space at this point from a technological standpoint. 4) 2mp ccd's are really cheap, and Apple would have to disclose whether or not it is interpolated in their product documentation. I've found the quality to not be interpolated, but it is harder to tell in lower light conditions due to hand shake.
Overall the iPhone camera is the best I've ever used in a camera phone. If you look at it that way, it's not so bad. I find it convenient to use for snapshots to put up on facebook when I'm out with my friends. I don't like lugging around my SLR's and giant L lenses all the time. I would never submit an image taken with it for critique in class unless it was for an experimental project for Digital or something like that. The iPhone CCD does have an interesting effect where it records in bands across the CCD. An example of that can be found here.
Otherwise I agree people shouldn't be fooled into believing this will replace their digicams anytime soon, but for a phone, it's a dang good camera.
