His point is that the iPhone is making apple boatloads of money and that their phone platform could potentially eclipse their PC and iPod sales. The point, (and worry perhaps) is that apple could reasonably start focusing on phones more than on PCs and make boatloads of money. They clearly make a better [smart/media]phone than anything out there and this has shown in sales.
They don't "feel" the need to charge people for Touch updates, they have to legally, or at least thats the way Gruber presents it and I'm pretty sure that is the case. Why else would they count iPhone sales on a subscription base? I'm sure its a pain in the ass for the accounting dept.
Do these "Normal" people live in "real" america. Other touch screen phones are totally lame and anybody who has used an iPhone can attest to that.
(I don't own an iPhone. $90/month is out of my budget)