The head AT&T Wireless muckety-muck, Ralph de la Vega, admitted their network needs help, mostly in NYC and San Francisco. Yes, the iPhone has set expectations higher than they planned, but there have been other contributing factors.
In the realm of no-good-deed-goes-unpunished, AT&T gets credit for improving their network by adding 3G service to their 850 MHz cell channels. That enabled a whole new batch of customers to use their iPhones deep within buildings, compounding AT&T's capacity problems. Of course, the expanded service is a good thing, but they just keep feeding us more chocolate and we keep asking for more. de la Vega says the day is coming when the networks will need to limit downloads. After all, only 3% of AT&T's wireless users are consuming 40% of the bandwidth. What a bunch of hogs. I bet they'll still give them some more chocolate!