Too many great iPhone games suffer from digit interruptus: onscreen controls force your thumbs or fingers to block too much of the action. Plus, there's no tactile feedback. meaning you don't get the button-mashing goodness associated with the best console and arcade games.
Developers have proposed a variety of solutions to this problem. For example, ThinkGeek's iCade 8-Bitty gives you a Nintendo-style controller with a D-Pad and lots of buttons -- but it works with only a smattering of games. Plus it's a hassle to carry around.