The most important part of the smartphone is the OS. iOS5 is going to be a major overhaul. I believe it will keep Apple in the running for best smartphone. The hardware only matters to the point where it is holding back functions of the OS because it can't keep up. iOS does just fine with the hardware that is currently provided.
People who believe specs are extremely important will never be convinced otherwise... even by the perfectly rational argument above.
I do agree to an extent. But, you would have to think that Apple is designing iOS5 to run best on the new iPhone not the iPhone4. Why design a brand new OS to run on 1 year old technology?