Purple flare around sun. | Source: weaksauce12 via Twitter
While posters to the now three page-long thread are quick to claim the purple haze is a flaw in Apple's 8-megapixel shooter, the problem is actually common to digital photography and is called chromatic aberration, otherwise known as "purple fringing." The image distortion is especially evident when a strong specular light source, like the sun or a flashlight, is present in or near the image.
Some speculated the purple fringing seen with the iPhone 5 was caused by either a fault in the camera's design, new lens structure or sapphire lens cover, however it appears the problem lies in one of the most basic shortfalls of camera technology: distortion.
As with all optical elements in a camera's lens array, light is bent at different angles as it passes through the substrate, usually some form of glass or plastic, to converge at a single point on the focal plane. In the case of digital cameras, the focal plane is the unit's imaging sensor which, in the case of the iPhone 5, is of the backside-illuminated CMOS variety.
At issue is a lens array's refractive index which numerically represents the manner in which light, or more specifically wavelengths of light, moves through the optics system. Ideally, a lens will focus all colors, or wavelengths, at a single point on the focal plane, thus creating a near-perfect replication of an image. In practice, however, lenses don't allow for wavelengths to meet at a convergence point, creating what is called chromatic aberration.
Due to a number of factors, including reference tuning, architecture of digital sensors and relatively short focal lengths in smaller camera systems, chromatic aberration usually presents itself in shorter wavelengths like violet.
High-end lenses can be adjusted to deal with axial chromatic aberrations, those that cause color fringing, and are called apochromatic lenses, though these types of systems are costly and bulky as additional glass elements are added to the array. Another form of compensating for the distortion are aspherical lenses that are specially designed to reform light to achieve more accurate focus. These elements are also costly, however, as a multitude of steps are needed to manufacture the glass.
In the end, the iPhone 5's camera most likely has no tangible design flaws and is only a victim of the intrinsic qualities of photography. Perhaps a specialized algorithm can be instituted to compensate for the violet push, though any changes made to the existing post-processing flow will likely throw off other finely tuned aspects of the system.