I suspect the intersection of a) people who care about Twitter, b) who use twitter via sms, c) people who do not have phones that hide/abstract away multipart sms so they've got 300+ character messaging - is so small it'd be less expensive for Twitter to buy all three of them a new iPhone every 2 years instead of hold one meeting trying to solve the problem ;-)

(Note: I'm not convinced long-tweets are "the killer idea" others seem to think - like someone else put it, the reader's attention is the limited resource, not the service's ability to publish characters. I don't scroll thru Wordpress/LiveJournal/LongReads on the train or while waiting for coffee...