Personally I don't like the color cast of the iphone images, but just as clearly it's good enough for most people. I still don't see phones replacing dedicated cameras for people that are serious, but that's more a matter of optics and form factor. Phones are terrible for shooting a stable image. OM-1 shows where I'd like to see larger sensor cameras go: high resolution image stacking, smart motion correction, etc.
I think iphones and similar phone cameras make sense for video in broad daylight if you're not too serious about it--no need for built-in ND filters, the stabilization is pretty good, especially if you put it on a gimbal, etc.
Once conditions get rougher is where the tiny sensor and plastic optics are going to let you down though.