On the contrary, I think the cops should be busting people left and right for that. First of all, driving-while-cellphoning does create a genuine risk for other road users, not just the driver - I live in SF too and entirely agree that drivers here pay no attention to the law. Second, if drivers become aware that chattering or texting on their phone imposes a real risk of being busted and ticketed, then if anything it's likely to make them more cautious about other aspects of their driving.
I think you're looking at it from the perspective that if the police are busting cellphone users, they're not chasing reckless drivers; but that assumes a flattening of both geography and time. As it is, if a cop is there to see you using your cellphone while driving, there's no logical reason to assume that ignoring you increases the cop's chances of detecting other kinds of illegal driving. Usually police are assigned to particular duties, so if a cop is on the traffic beat it's not like s/he is being diverted from investigating murder or robbery by pulling someone over.
So, instead of banning the use outright, which a lot of people will object to because nobody likes to be told they can't do something (ignoring the whole driving is a right motto). I'd just say, increase the fines to the level of a red light run and increase the enforcement. The only people who will object to the fines are the people breaking the law. ;-)
The existing laws (I'm in San Francisco) are completely ignored and unenforced as it is. I see people using their cell phones while driving all the time. I'm sure the cops have better things to do with their days than pull over people talking on their cell phones. As a result, I'm now trained to really watch out for drivers who are on phones because I know they are dangerous and not paying attention.
I feel that even hands-free is distracting to drivers, I know it is distracting for me and I'm a great driver. If I need to use the phone while in the car, I either hand the phone to my wife, I pull over or I just hold off until I get to my destination.