The people you hear bashing the Iphone are doing it because of the exclusivity clause with Apple, not because of the phone itself. AT&T shows complete disregard for people not in large urban areas. We want an end to the exclusivity clause so we can enjoy the iphone as well, or at least for AT&T to end its tower building strike in the middle states.
Not entirely true. Here in Canada the iPhone is on multiple carriers. IMO, the reason some people feel so negatively about Apple products, and the iPhone specifically is the zealousness of some of their followers.
Apple blatantly lied in their "Mac vs PC" ads for years and got away with it, mainly because they are such a small percentage of the computer market. They simply can provide features that Microsoft cannot due to Microsoft being ruled a monopoly.
With the iPhone, however, they have very successfully become one of the market leaders, at least in North America. This is despite extremely basic features of a phone being missing on each iPhone release. Cut and paste, irregular headphone jack, dropping calls, an antenna that doesn't work etc. While there are work-arounds for each issue, the faults are often disregarded by some iPhone users, as they adapt to their phone rather than having their phone adapt top them.
Also, Jobs' attitude contributes to people being on one side of the fence or the other when it comes to Apple. You either love his ingenuity and style, or hate his arrogance and creation of such a closed system. His disregard for Flash on iPhones is a perfect example of this. Arrogance or foresight is in the eye of the beholder.
No one can challenge the innovations that Apple and the iPhone have brought to today's technology (although many of their "innovations" were done elsewhere and just successfully marketed by Apple). They produce excellent hardware, but it is not the only excellent hardware out there.