The fact that a newer phone gets better reception was not part of antenna gate.
Reception of the iPhone 4 was significantly worse than the 3GS that came before it.
It wasn't overblown at all. They totally screwed up the antenna design, and because of their release cycle it took them 2 years to fix it (with the iPhone 5)
(Also, "a certain way"="the way a normal person holds their phone when they put it on their ear")
But if you live in an area with poor reception, it is very noticable. For me, it always happened when I was in certain rooms of my house. I'd typically pick up my phone, walk out of the living room to not disturb the others, and then the connection would break up.
No other phone did that. The iPhone 4 had really crappy reception. People made fun of it, and it was absolutely justified.
I still loved the phone. The Retina Display was a breakthrough, and I still think it was the most beautiful phone ever made. But the reception was crappy.
Besides the one specific case if you held the phone a certain way which was a universal problem, all cellphone reception varies from area to area.
Which coincidentally was exactly the way many people always hold phones. A relative had an iPhone 4 and constant connection issues which completely disappeared after she put some tape around the antenna.
The reception at my parents house is horrible and I have needed to hold several cellphones in very specific ways for them to work there. This is going back to flip phones though the number of locations phones work has been improving over time.