Again, like others have said, it really all goes on what YOU want out of a phone....
Personally, no - I don't think that price for an iphone is worth it - no way ! But - and here's the "but" - I don't want a phone like the iphone as for one I detest touchscreens and secondly I want a phone that I can safely use for a good few days without having to keep on charging it. That's what's important to me - hence why I wouldn't even look at a iphone/HTC/Sony etc..etc..
In the end I went for a Blackberry Bold 9780 - this cost me £349 on PAYG - alot of money - but there again it does what I want - I only have to charge it about once per week and it had a great physical keyboard, fairly decent camera, good music player and loud ringtones... so although I accept that £350 on PAYG is still an awful lot of money for a handset, it fits my bill - therefore I am happy with it and I think, for me, it was worth it....
Whilst I have download some useful apps for it, obviously these aren't a touch on the iphone apps - but there again - these just don't really interest me at all. I am one of those rare people who really want a phone to be a phone upmost and foremost - but with the added convenience of a fairly decent camera and music player tagged on - I know the iphone is "all singing and all dancing" but - again, personally, couldn't give a monkeys about all of that!!!!!!
As I say, all comes down to what you want from a phone....and then I guess if you can afford it!