The cameras have image stabilization. It works quite well in good conditions. DSLRs have it, and if not the camera, you can buy lenses that do. If you have a steady hand, it can be 3 f-stops difference.
Your original gripe was about the placement of the flash. That is a legitimate gripe. Most of these photos and videos are not going to be entered in a show, or printed out. The users get a decent photo for a memory or illustration. They are not going to blow it up on a large screen. A decent clear lens and good lighting would be a benefit to those users.
A good photographer can take almost any tool, including an old box Brownie and get a superlative picture. They have the eye, and they understand how to work the medium. I've been looking at some phone pics on camera forums. We have a few members here that have taken very good pics with phone cams.
I prefer a DSLR with an optical viewfinder. I am not a fan of excess megapixels. If I can print a decent cropped 8x10, I'm happy. I'm not in the business and will please myself. The phone is good for something I wish to send SMS or email. My bridge camera will do Eyefi, the 20D will not.