So would anyone say Apple dropped the ball with this phone? In terms of maintaining their hardware standard, innovation and/or meeting expectations?
I think it's easily been their shakiest release even though AntennaGate was a bit louder.
Hardware standard definitely dropped the ball, that much is fact. Despite all the engineering wizardry and beauty of it all, scuffgate is a problem that shouldn't exist. The "y'know, things break"-ish response from Apple isn't helping, despite them reportedly increasing quality control over in China.
iOS6 is having numerous issues and causing lots of glitches, thus causing a lot of controversy too. Overall, it adds a whole lot of nothing innovative. iOS is definitely showing it's age and the overhaul is long overdue. Doesn't need to be drastic, but it has been overdue for YEARS. Instead of meaningful stuff they keep introducing fluff like new maps and Siri. Facetime was a good idea though.
I think they did fine with meeting expectations for the most part. We got what we thought we were getting, and we got a bit more in some areas (camera, battery life) and a bit less in other (aforementioned issues). It isn't the most important release or the biggest thing since the OG iPhone, but it's a goddamn new iPhone so you know it's meeting the majority of people's expectations regardless.
EDIT: IHaveCandy's list is pretty good for stuff they should have that they don't.