While I don't completely disagree with this, I think it disregards the importance of just how revolutionary the software stack/multitouch interface were at the time. Looking at the Japanese market, Apple demonstrated that you can have all the features in the world, but if you're UI/software stack is poor, you're likely to have the rug pulled out by a competitor that can create a device people actually want to use. Steve may have initially been wrong about a few things (the App Store most prominently,) but he got the most important parts of the initial release right and was willing to have his mind changed on the rest. Oh, and he was also a master salesman, the reality distortion field was real.
Multitouch would have given the iPhone an advantage for a generation or two, until other manufacturers integrated it into their devices. The launch of the AppStore made it much more versatile and fun, and was a much harder feat to replicate.
Between an SDK built on top of the excellent MacOS X -> iOS operating system and services, the world class developer tools that came with all of that, and the sales model of the AppStore giving every dev easy access to essentially every iPhone user in the world, the only way to compete would be another similar software stack-- ie. Linux -> Android. This completely undercut all of the technical capital the existing players had built their products on and forced everyone to start from square one, well behind where Apple had already gotten.