How many prior-iPhone devices actually had fully finger-usable interfaces? Pretty much none, and certainly no mainstream, mobile device.
On the other hand, the iPhone was a tremendous success, and I don't believe this was just because of Apple's marketing hype. Think about it - the hardware of it is average at best, but the UI is a step ahead, not least because it ditched the stylus and is based on an interface that just doesn't need one.
I actually think it's a silly prejudice to think that stylus-less UI's can't be similar capable...

And note that I'm very far from an Apple or iPhone fan. In fact, I'm completely annoyed by the ongoing media hype that thing enjoys...