For someone from the future, you are too oblivious of the past. Unlike you guys, those who are right now driving the UMPC space has gone through many iPhone-esque devices already in the past and know to well the limitation of devices promise "teh internet" with a embedded CE device. The lesson learned over and over was that you can't have these limited capability CE device providing satisfying internet experience when the internet experience is defined on the full OS computers and is a constant moving target.
I personally went through Palm OS5 Clies with Wifi internet option 5 years ago (coincidently, the same resolution color screen as the iPhone @ 3.8" 320x480 transreflective LCD). There are tons of internet tablets that provide more full featured internet experience than the iPhone (
Nokia n800 for instance, which has a 4.1" 800x480 color LCD allows for viewing flash websites).
The only new wrinkle the iPhone is adding to all this is that the web viewing for a phone is closer to the real web experience than what's already being offered for ages on the Windows Mobile smartphones. But they accomplish this by cramming a huge OS (OSX in the iPhone has a footprint that's around 700MBs! Compare that with your usual 32MB footprint for Windows Mobile phones) into a device with a processor that's not able to maximize it (iPhone uses ARM processor that can barely handle flash, just like the Nokia n800).
Eventually, many iPhone users will find the web experience on the iPhone to be too limiting and will be wanting to move up to a device that can give them the real web. And not too far off (months), you can have those devices for not much more money.
Oh and BTW, the great thing about UMPC platform is that you can have both the full computer experience (whether on the device or on the desktop via a docking station), or a tailored for on the go experience with launcher/wrappers for the OS like
this.