Comparing a phone to a TV makes no sense, because you don't hold a TV up to your face. So 44ppi looks terrible on a phone, but great on an HDTV sitting 8 feet away.
And to those saying that a bigger phone is silly, I think you'd be surprised how nice it can be. When I had my Moto Droid, same size as iPhone basically, I thought the same thing. Then my wife got a 4.3" screen DroidX, and I was kind of like, hmm..... Now I love my 4.3" Thunderbolt screen.
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