So are you saying that those games won't be on the service?
Dude, everyone plays those games. Not having them is kind of like not having soft drinks at McDonalds. Sure, lots of people will opt for the Sundae (Monkey Ball, etc.), but you have to have your staples. Not everyone who owns the iPhone is a gamer, or cares about games all that much. Some people just want to kill time on the way to work.
I don't really think it matters whether the games are complete shit. The standard owner of an iphone will keep buying them as it seems most casuals (not all) don't care about quality in their games. I'm talking about the casuals who only play cell phone games.
Hell I'm an average gamer and I find myself downloading random cellphone games when I'm bored, regardless of their quality.
It'd be interesting If this signalld an intent by Apple to focus more on getting a working "gaming platform" on their Macs as well since they're the most like consoles in regard to fixed hardware specs. Sure there's a lot of variations in hardware, but not as much as typical Windows PCs allow for.