I agree despite the lack of the memory card slot. Phones are phones, MP3 players are MP3 players and digital cameras are digital cameras. I'm not going to McDonalds to go grocery shopping, rent a movie and get fast food just like I'm not using my phone for pictures, music and phone calls. I would go to Mcdonalds for fast food and I use my cell phone to make phone calls thus the memory card doesn't mean too much for me.
we are in a world of converging devices. 5 years ago who thought anyone would use a home pc as a stereo system, today this is not uncommon. but you're right. currently the technology is not quite there(mostly) in production handsets. but in the next year i think we can look forward to phones that make great mp3 players, e.g rokr 2 with it's supposed 1000 song limit, nokia n91; and to phones that make great digital camera's as well(like the se s710 but not crap), although i don't believe we will ever see full replacement of high end camera's like we will for mp3 players(i just don't see an slr camera phone) but you're common everyday digital camera that everyone has will be replaceable by a multi function device.