Good iPhone apps can feel as though you can understand them completely, even to non-technical users. (It’s not automatic, though. Everyone who has ever used Stanza knows that.)
The Browser (especially ones like Chrome and Safari) is pretty much the only desktop app which can feel that way, too – at the moment.
For example, the app store. Sure, they could allow some other channel for installing apps that isn't restricted. Some apps would be available only for this alternative channel because it's easier or freeier or better somehow. They give instructions on how to install it. It's complicated. A user might try to get something running on her iphone and fail. She might get her daughter to help. The app has some quirks (that's why it isn't allowed in the app store) When she uses someone else' iphone it's complicated and difficult because it belongs to a"power user".
This adds up to the feeling that the iphone is complicated and hard and breakable and you need to know what you're doing with it.
It's naive to say "don't install unapproved apps" or stay in the non-power user world. If it exists, people will be exposed to it.
Think of the early days of GUI. Lots of non computer people where shown how to do something until it stopped working for whatever reason. At that point they asked for help. The helper immediately opens up the command line and demonstrates how you really need to know a little bit about the command line to get some things done.
Do you really think that's hard? Do you take the majority of humans to be complete and total simpletons?
Give my grandma an iPhone that's powered up but with nothing on the screen and tell her "This is a telephone. Go ahead and call your neighbor on it." without any help. She won't get it. I guarantee it. Someone will have to demonstrate it. And as you said, people like her are not a small minority. And the iPhone doesn't solve any problems.
It's just a different UI. Then you start getting into gestures. Hey grandma if you have trouble seeing that picture, just do a "spread" or "pinch" on the screen. Do you know what her reply would be? It's go something like "lolwut?"
She'd eventually chuck it across the room, because while it's not HARD, people learn by demonstration. People have been learning by demonstration for tens of thousands of years. Why do you think trade skills such as carpentry needed to be handed down?
They don't have a grasp of what they're doing. They know this. It intimidates them. They're afraid of breaking something and need to ask for help all the time. They hate it. It's disempowering.
These are not some small minority. These are a lot of people.
An iphone can be picked up, used, and give a larger number of people a feeling that they can understand how it works. They are in control. They don't need any help. If they can keep that and replace more of the the desktop, they'll want it.