If the iPhone is to be taken as a serious gaming device, it's got to upgrade its processor and add some buttons. When you cover the screen with your fingers, that 4" screen turns into a tiny 2x2" screen (the actual dimensions are unknown to me, but you get the idea).
Which makes you think: why render the portion of the screen that' your fingers are covering anyway? Couldn't you save on some computation overhead by making that section of the screen a static 2D image? Or just make it black and save on some battery.