For me it was, essentially, a bigger screen. Apple seems to be touting their iOS more then anything nowadays and with the issues with their MS Exchange, Maps and various other oddities, doesn't seem like they're as diligent in QA as they used to be. Other companies have released 4" screens already and, just now, Apple figured out a way to make a 4" screen phone simply by making it longer?
I dunno, iOS/iPhone seems to be at a stalemate in terms of design/functionality for me so it was time for a change.
Overall, the iPhone 5 is pretty much the same as the iPhone 4/4S only longer. Since this was supposed to be a major upgrade cycle, I was expecting some out of this world, cutting edge design with faster specs and all the bells and whistles. Instead, the put out a similar looking phone that was slightly longer/lighter/thinner. Seemed like after months of R&D/Design, the best they could come up with was "just make it longer".
The customizeability (we'll assume this is a word) of the Android OS was another appeal to me as well. The widgets are a nice addition as well. iOS looks the same now as it did 3/4/5 years ago. I would think Apple would make some UI changes or different layouts or something, anything during that time but, no, they didn't.
Granted, not everyone wants a larger screen but, then again, a lot of people DO want a larger screen. Apple being Apple seems to only care about those people that agree with them rather then listening to their customer base. I had gotten tired/bored of my iPhone 4 for quite some time now and after watching the keynote for the iPhone 5, I was bummed that there wasn't that much going on with the new iPhone.
I'm big on phone specs as well as how it works with whatever OS its running and while the iPhone 4 worked well in both regards, it was lacking in the specs department. I'd like to have a phone with a good/great camera, NFC, beefy processor/lots of RAM, SD slot, certain degree of customization, etc. iPhone 5 didn't have a lot of that. The Note 2, does.
Overall, I just wanted to new toy to play with. I'm still big on the iPad/MacBook Pro as Apple seems to be moving along okay with both of those product lines. The iPhone, on the other hand, seems to be stalled and in need of something really good to change its pace. I've never been a fanboy of either Apple/Droid so I'll pick whatever works for me. This time around, the iPhone 5 was lacking in all the things I wanted so I had to pass.
Oh, and the new connector they have employed now was almost like a slap in the face. It's an interesting technology and it had to be done in order to shave down some space for all the new goodies but it's like I have to buy all new cables/connectors/adapters now that this Lightning cable is introduced? Really. Only a handful of companies have JUST starting putting out stuff for Apple's Thunderbolt cable and now people will have to wait for new Lightning cable-ready accessories too.