First of all, you did not say they should have replaced the dock connector, you said that they should have added a microUSB port on the side. That definitely would have increased the size of the phone. There is just no room to add another connector to the phone without changing the size. And it would put an additional hole in the beautiful structure of the phone.
Secondly, if you now want to argue that they should have replaced the dock connector with microUSB, then you're on even more shaky ground. There are tens of millions of accessories out there that use the dock connector and which could NOT be adapted to microUSB. You would be making all of these accessories, some of which cost hundreds of dollars, completely useless. Not only that, but a 4-pin USB port simply cannot duplicate the functionality of the 30-pin dock connector, at least not without greatly increasing the cost of accessories, which would need to have USB controllers and computer chips just to split out the various control signals, etc. You're talking a huge change in how the iPhone works.
I would have been mildly upset if they'd increased the size of the phone to accommodate an additional useless connector, but I would have been outraged if they had replaced the dock connector with a microUSB.