This is really a case of a bunch of sites grabbing a hold of one piece of information released by a single source and regurgitating it without any further investigation of their own. At least Brighthand decided to do some legwork and updated their original posting (
http://www.brighthand.com/default.asp?newsID=14256).
It looks as if the purpose of this "evil" functionality is to protect the iPhone's users from applications that could send a phone's location information back over the internet. If iPhone users suddenly started receiving targeted advertising (via SMS, or otherwise), based on their current location, people would be crying foul as well. They'd demand that Apple should have seen this coming and built a system into the iPhone's software to prevent such "abusive" and "intrusive" use the devices GPS data.
I'm both a WinMo user and an Apple user. I try real hard to look at both ends of the spectrum with objectivity. Both platforms have their pluses and minuses. Many Microsoft proponents love to talk about Apple "fanboys," but refuse to see any positive things coming out of Apple at all. They're fanboys in their own right. What are the odds that Smartphone Thoughts will do any leg work of their own or even update the original post with the possibility that Apple
might have had good intentions? Probably pretty slim.