Basically, "magical software" does not constitute software that already runs on the devices I have right now. Even without any of the other external features (front-facing camera, etc.), the fact that they didn't wait to release this until they had the 4.0 SDK ready was a shot in the foot. They would have had a much more "compelling" release otherwise.
(Actually, I think I explained it better here than in the blog post.)
(Actually, I think I explained it better here than in the blog post.)