Earlier quoted context omitted.
Since when is caching a substitute for integration?
I'm not sure I understand what you mean by integration; are you proposing that the mapping app contain the complete map data, which is then occasionally updated as needed? There's a clear advantage to not storing several GB of data you rarely if ever need on a device with very limited storage space.
Cell phones could easily provide navigation capabilities for at least the country of origin of the buyer and several around it if the creators decided this was a desirable thing.
All of the US is 1GB. See here: (dutch):
http://www.laptopshop.nl/vragen/29528/115735/tomtom-navigato...
Flash runs a few $ / G. Of course your phone manufacturer will screw you completely on the memory when you buy it (the price difference between a 16G and a 32G phone is ridiculous, but I guess I can't fault them as long as people fall for tricks like that).