Not just that they went for that - but that they ended up in that situation to begin with. IIUC, the outer rim was two (or more) metal pieces, whereof one acted as antenna. The signal degradation occurs when the user holds the phone and bridges the antenna-piece with a non-antenna piece. This affects the antenna tuning and attenuates the signal.

Just missing out on such a basic thing is a bit boggling to me. My iphone 4 was working pretty good though, but I was also mostly in the inner city where connectivity is good to begin with.