Distinguish between "handling media better" and wrapping it around a better user experience. With the notable exception of visual voicemail and shoving Safari under the hood, the iPhone didn't bring any other major new
functionality to the table. In fact, between the lack of basic text copy/paste, MMS and video recording, an argument can be made that they actually chiseled away at what people expect even from more basic phones.
And yes, WiFi is actually pretty common in your average smartphone.
1) You can get unlocked phones in the U.S., most cost just as much as a
locked iPhone.
2) Even if your GSM phone is carrier locked, a simple request via email can get you the code so you can use a different SIM in the device. There's usually a policy in place to prevent people from getting cheap hardware and leaving the service; AT&T in particular makes you wait about 90 days before they'll give you the code. The
problem is that AT&T's attitude seems to heavily imply that they'll never let their customers unlock an iPhone through official channels. Which is weird,
because the U.S. copyright office explicitly points out that this is cool under the DMCA and there's no real legal footing to say no under copyright statutes. The point, really, is that phones are locked and the heavily-subsidized price is given to the customer in return. The
issue is that the iPhone's price isn't subsidized at all, so where's the rational for locking the device outside of general douchebaggery on the part of Apple and AT&T?