Everyone I know that owns one, and everyone I ask who has one have said
they are very happy with their iPhone.

I don't think it so much that they can't afford the iPhone as that
these groups are infested with trolls who have to have something to
hate.

The return rate is very high. I have a apple store and a AT&T store in town.
The return rate is higher at AT&T then the apple store. Apple charges 20%
return fee.
AT&T gives you 30 days to try with no return fee's.

Was told that the return rate thru AT&T is around 25-30%
Apple company wide is around 20%

Number one reason is battery does not last very long.

Correct.  I just dropped ~$600 on a new phone last month, that uses up
my phone budget for this year.  Maybe next year.

I'm a gadget geek.  I buy lots of toys, and I gave the iPhone a good
hard look, including purchasing an iPod Touch to get familiar with the
interface and applications included, plus the keyboard and over-all form
factor.

I've seen a few -- I spent last week at a developer's conference down in
Texas, we had seven (I think) attendees with iPhones, no one person was
completely satisfied.  Don't get me wrong, most were happy with their
purchases, but I did rather enjoy finding out what features people felt
was missing, and showing that it was either included on my phone, or
could be added (usually without going near a desktop PC)

Most of the complaints were due to a few different issues:

Lack of 3G --  Either for coverage or speed reasons -- The hotel has
very poor GSM coverage, although my TyTN II did seem to have three solid
bars, more then enough for a phone call, even with 3G turned off.  The
iPhone guys could TXT, but phone calls were hit and miss.  The Razr V3
was also hit and miss for voice (but then, it's several years older)

Lack of GPS -- Which you might not appreciate until someone drops you in
the navigator seat in an unfamiliar country and either aren't willing to
pay for roaming data, or don't have sufficient coverage to download
Google Maps data on demand.

Lack of physical keyboard -- Okay, I went trolling for this one, one of
the guys was crowing over how great the keyboard was, so I suggested we
play "who can type the names of each company and individual attending
the conference the fastest" -- The iPhone was beaten by my TyTN II in
both keyboard mode *and* style-keyboard-on-screen mode, a Treo, and even
an original Razr V3.

Lack of IMAP IDLE -- The iPhone needs to poll for mail every once in a
while, it's not capable of receiving mail pushed out from an arbitrary
IMAP server, only a couple special ones defined by Apple.  This can be
important when you're roaming and paying substantial TXT rates, but need
to get a quick "hey, I'm getting a ride in the company truck, don't hold
the shuttle for me" message out.

Lack of any server based contact and calendar synchronization -- SyncML
has been included in every non-smartphone I've owned in many years, and
is a software add-on to every smartphone I've owned or used.  Now sure,
you could hack the iPhone and add SyncML... In fact, one guy did:

A full half of the phones were SIM unlocked and/or application unlocked.
In fact, during the conference 1.1.4 hit, one attendee ended up bricking
his hacked iPhone (he says he didn't intend to update, clicked the wrong
button or something)

Don't get me wrong, the iPhone does have a pretty decent browser (better
then any other portable device I've used), a decent form factor, and
despite being rather minimalist in terms of configirability, it's not a
bad interface.  However, it's not exactly a cheap phone at $399 with a
two year contract it actually comes in more expense with less features
then the AT&T TILT ($299.99 on a two year contract, after mail-in
rebate)

Or, there are other legitimate ways to spend $400-500.

Fair enough.

I had dinner with a friend last night who's been a huge iPod fan from day
one.  He's owned Palm Treos for several years, and I've continually
harrassed him (without success) to let me show him how to use the various
options (he essentially just used it for PIM functions to avoid lugging
both a Palm and a phone.  He didn't even bother with a data plan.)  

Last night he was showing me his new iPhone.  He loves it dearly, and was
giving me the laundry list of things it could do- e-mail, web browsing, yada,
yada.  Not one thing he mentioned was a feature that wasn't available on
his old Treo.  (And a few the Treo did better- for example, to access
needed documents on the road, he e-mails them all to himself right before
leaving to access them with the iPhone's e-mail client because he can't
transfer them to the phone.)

All-in-all, though, he's another satisfied iPhone customer.  

Perhaps a few of them, but most are guys like me who think the iPhone is a
perfectly nice piece for what it is, but are tired of the fanboys
announcing every feature of, or website for, the iPhone as if it's a new
technological breakthrough in mobile telephony.

Well, that depends on how you look at it.  It's price tag is a fashion
statement, but Prada doesn't have the evangelist style fanclub the
iPhone does.