I think most phone photos serve the purpose of saying, "I was there."
Combine this with many phones' ability to immediately send the
photo to others, or post it to Twitter, and I think you've got a very
useful gadget for a large number of folks.
The cameras in phones are improving with each product refresh.
It's not unusual to find a 5 megapixel CCD with dual LED flash elements.
A few have auto focus, xenon flash, face detection, image stabilization
and GPS tagging.
The best camera is the one you have with you when you find a
subject you want to capture. If you want to carry a G11 everywhere,
then more power to you.