The iPhone camera isn't that good. At least not any better than most other phones.
Oh yeah? Prove it! Show me some photos from a cellphone other than the iPhone which are any good.
It's a hell of a lot better than the one that was in my LG Rumor, that's for sure. And the LG Rumor is a very new and popular phone which costs about $80.
See for yourself:
The iPhone inside a dimly lit bar with tinted windows:
The LG outdoors on a partially overcast day:
Note how the LG does a lot of noise reduction and sharpening to try to hide the blur, whereas the iPhone appears to do no processing on the image at all and it still looks great, with only a little noise that could easily be cleaned up in photoshop.