Some more great reasons indicating the failure of the iPhone:

Is the iPhone worth supporting the evil AT&T empire?
The iPhone is super-hyped, but is it worth getting if it means giving money to the privacy-hating, monopoly-having bastards at AT&T? Gizmodo examines why it might be worth skipping the iPhone to maintain a clear conscience. [LINK]

$175 Fee If You Cancel iPhone, Even Though You Paid Full Price
You better like your full-price iPhone because if you don’t, AT&T plans on charging you the full $175 early termination fee, even though the phone’s cost isn’t at all subsidized under a long-term-agreement. [LINK]

Will the iPhone be a Security Nightmare?
With Wifi, Bluetooth, an API based on Safari which had numerous low complexity zero day exploits I think this is a valid concern. I’ve also got concerns around an Ajax API that can read from on-phone resources such as the calendar and address book.
[LINK] 

Hackers Can’t Wait for iPhone

Technology fetishists aren’t the only people itching to get their hands on an iPhone. Hackers want to play with Apple’s new toy, too.

Within hours of Apple’s iPhone unveiling this week, the iPhone was a hot topic on the Dailydave discussion list, a widely read forum on security research.

Much of the discussion centered on the processor that Apple may have chosen to power its new device and what kind of assembly language “shellcode” might work on this chip. “Is this beast running an ARM?"

[LINK]

Lastly, I think the battery life on this device will be pretty poor. You’ve got a large power hungry screen, with a touch-sensitive layer over it. Add to that the bluetooth and wifi components, I think it’ll drain pretty fast.