From John Gruber‘s essay on touch keyboards and Apple:
Apple tries to make things that many people love, not things that all people like. The key is that they’re not afraid of the staunch criticism, and often outright derision, that comes with breaking conventions.
That the iPhone — or specifically its software touchscreen keyboard — does not appeal to everyone is not a problem. Nothing appeals to everyone. Even if you try to make something that appeals to everyone by adding every single clamored-for feature, you wind up with something like Windows that does not appeal to people with a taste for the elegant and refined.