I think it would be too much flash for too little camera
well yes i know the apple logo is rather large, but you can vary how bright it is. only give it as much flash as it needs.
and require too much space in an already cramped container
I can't imagine a tiny little light taking up too much room. and the speed that sizes are shrinking should make up for that come 2010
and too much juice on an already taxed battery.
it'll only take up battery life if you use it. you'll only use it when you need it. if you only use video and pics in good lighting it won't affect your battery life at all. Yeah obviously the more you use it the more it eats up your battery, but that's only if the person wants to use it. (plus lighting a bulb doesn't take nearly as much power compared to accessing the internet at high speeds)
I mean yes i can see your point that apple probably won't go in that direction to make the camera compete with stand alone cameras.... but i know i actually do want my iphone to be able to replace my camera, eventually. Sure there may be other features that are more important, but at this point it's kind of hard to see what that is.
On the hardware side I can only think of
front facing camera? this is something that will almost certainly be added at some point. who knows when.. I know that at this point it doesn't serve a huge need for me.
faster processor? yes this will be done, but maybe not next year since we just had a substantial bump
Better camera? This could fairly easily be done
Flash camera? this could fairly easily be done
more memory? Yes this will certainly be done
What else? just minor tweaks really...
