The first-gen iPhone lacked a ton of features, from copy and paste to the App Store to 3g connectivity. And its starting price of $600 on contract was unheard of, and considered ridiculous at the time as well. Even now, the iPhone continues to add new features every year. Who is to say when a product is "finished" or "unfinished" when it is clearly a constant piece of work in progress?Jobs wouldn't have released the watch the way it was, an unfinished product.
Jobs wouldn't have released an iPhone that was WAY out of people's price ranges with the EXCESS, much less having a store with 4 different versions of the iPhone for sale at the same time.
Apple's sales numbers for the next two quarters will likely beg to differ. That there is no shortage of people ready to pay top dollar for the iPhone regardless of its price.