If you care about keeping the World in WWW, and ensuring the content you create is accessible to all, then it will be a reality for you as well. ... If you publish information on the Web, I can’t encourage you enough to try design your site with these devices in mind.
The idealist in me (especially circa 2004 when I had Wikipedia-mania) wants to agree.
It depends on what the goals of a site are. Is it Wikipedia? Yes, it should absolutely look good on 128x160 screens.
Is it a business? Well, then it depends on who your customers are. If your customers are worldwide and from a diversity of economic circumstances, yes, design for the small screen. But if you can reasonably assume that most of your customers use desktops, laptops, high-end smartphones, or tablets, then I don't think it needs to be high on your list of priorities.