AT&T service
Yes, AT&T service has been pretty shitty. It's hard to make this a direct knock against the iPhone, even recognizing the exclusive deal. I believe that Apple is pushing AT&T to fix this issue in one way or another. Though it has been taking way too long. Still, I don't consider this a pure iPhone issue.
major limitations in some of the applications such as email
Really? Have you truly tried some of the Android apps, Brad? The default email client on the Moto Droid I had for a month didn't even support signatures. Many of the other apps I downloaded and tried were half-baked at best. Some were targeted towards specific handsets, others just didn't perform as advertised. There have been very very few iPhone apps that I've downloaded that didn't do what they advertised (note: I also read app reviews first. If the majority of the reviews are 1 or 2 stars I skip it.). My personal experience was that Android apps were fairly poor as a whole, though there were some really good apps too.
restriction of Flash
Until I see true working version of mobile Flash, I don't blame Apple for not including it. I've never felt slighted by my iPhone not supporting Flash.
lack of tethering
This is, again, a carrier issue. So, you're not really comparing handsets, you're comparing carrier restrictions. Again, I get the exclusivity part, but this isn't really an iPhone limitation.
lack of statefulness, lack of multi-processing
Yeah, these bug me at times also. Though not significantly, and my Droid ATE the battery if I tried to multitask an app that did a lot of background network activity. So again, I'm not sure this is true iPhone issue as much as an overall technology issue.
and the unbearable shittiness of iTunes for Windows
What about the unbearable shittiness of Windows in general?
Sorry, but I put less merit into someone who switches products after getting one as schwag. I thought my Droid sucked and wasn't worth what I paid for it. If it had been free, I may have been more tolerant of it and wooed by the novelty factor.