I can afford an iPhone, I own an iPod Touch (so know how iOS works) and know a number of people who own iPhones.
My iPod Touch does exactly what I want it to - stores a good portion of my music and lets me organise and play it easily, performs super-fast, has a bunch of fun games and novelty apps and has a high-quality display for videos - it's a well built device that I appreciate very much, but I wouldn't want it as my phone (iPhone = iPod Touch + phone).
I'm not being biased, I just don't see what the iPhone has to offer any more really over the Androids if you look into the features - Android is far more customisable from the outset (even before "rooting" which is the equivalent of jailbreaking and can be done in seconds), the apps are far less restricted in what they can offer due to not having such an "approval" process as in the Apple App Store - in fact there are quite a lot of third party "app stores" for Android now.
The way the apps can integrate themselves into the basic functioning of the phone far surpasses what I've seen on iOS, where they are more like standalone entities.
I can see the Android market/app development surpassing the Apple App Store in the not too distant future, this article backs that up;
http://www.mobilecommercedaily.com/...-content-platform-in-the-world-by-august-2011
Other things such as the presence of more physical buttons for easy navigation, the less intrusive notification system (plus an LED turns on if the screen is sleeping and you have unread notifications), homescreen widgets, removable/upgradeable storage and custom ROMs make it the more practical choice as a phone in my opinion.
The iPhone has a classy design and does perform very well, it's by no means a bad phone, but it is no longer the best money can buy. If you look at the pros and cons rationally, I fail to see how you could come to that conclusion at the moment.
As a toy/fashion item it's still king, but that's all.
P.S. - I think the logic that "people who can't afford it try to knock it" can be turned on it's head, into;
"People who are silly enough to waste their money on it try to justify their purchase"
Not many people are going to spend hundreds of pounds on something and then go on to have a balanced opinion of the superior altervatives.