This isn't so much a commentary on PhoneGap as much as it is HTML5 as an application platform. The bar for an application tends to be much higher than a web page; a fantastic web page may be pretty shit when compared against the app bar. Users have fundamentally different expectations around responsiveness, interaction and fluidity for an app that they had to go install as opposed to a site they visited.
Apps demands certain responsiveness, and replicating that behavior in HTML is exceptionally difficult and leaves the user with a bunch of UI behaviors that are close, but not quite right. Fluidity in user interactions, specific scrolling behaviors and so on that are exceptionally difficult to replicate across platforms.
A browser is also a pretty leaky abstraction. Targeting an API level in Android guarantees a specific set of behavior and functionality, but targeting a browser offers no such guarantees. The Samsung Galaxy S2 has a modified fork of Webkit that provides device-specific app problems within the same versions of Android, which make releasing a quality product pretty difficult to guarantee.
And, of course, different screen dimensions are a problem. Android devices can range from variable aspect ratios with a minimum width of 240px all the way up to 1280px. Responsive design is a bit of magic that can be sprinkled on to help make things work better, but that's a substantial bit of effort relative to using the native UI tools for each individual platform.
edit: Another challenge with PhoneGap applications is targetting iOS. HIG without designer assistance is a challenge, and this particular gem in the iOS approval guidelines is somewhat damning: 2.12 Apps that are not very useful, unique, are simply web sites bundled as Apps, or do not provide any lasting entertainment value may be rejected.