John Carmack may not be the best game developer/designer, but he is still among the best game programmers in the world. When it comes to predictions about technology there are few developers who have made nearly as many predictions and been as accurate as John Carmak. Now, being that the PSP and Nintendo DS are over 3 years old it shouldn't be surprising that the iPhone would be more powerful than them both combined; and with how close the PSP is to the performance of the Dreamcast or PS2 it should be surprising that the iPhone is similar in processing power to the PS2 (or possibly the XBox).
Now, a lot of people probably try to take this performance analysis to make assumptions about the types of games that should be made for the iPhone; or make assumptions about whether this device is suited to game development. Personally, I would say that although the iPhone has the processing power to support similar games to the PS2/XBox I think that would be a mistake. In my opinion, most people who will play games on their iPhone will be looking to use it in a similar fashion to how people currently use their phone games; they will be looking to play something quick and easy to pass a little time while they're on the train or waiting for something. In other words, you will probably sell far more copies of a game like Bejewled than a game like Quake.