There are a dozen or more elements that are better about the iPhone. Everything from the big: the App Store versus the Android Market (from the consumer perspective) — to the little: the multi-touch and overall touchscreen responsiveness.
I would think Multi-touch/touch responsiveness has more to do with the devices and not the operating system.
I myself believe that Android will become the dominant OS on phones, because they've got developers on their side. All my hacker friends and developers are really excited to start hacking on android phones (as am I) and not so interested in developing for iPhone. I believe the biggest reason there are a lot of developers (more so companies) that flocked to iOS development is because of the marketplace, the opportunities it brought and that there wasn't any similar device available at that time.
A marketplace for apps will in the end become decentralized and the greatest apps will be for android because the smartest people will want to develop for it. History repeats itself.