I don't agree with calling it craptastic as I think that detracts for a valid argument but I don't think you can move the measure up 6 years and say something cheap qualifies as high-end or good when it's well below the state of the art. We can look at pretty much any technology driven industry to see features in the high-end trickle down to the low end. Automobiles are great examples of this.
What people are upset with is that a brand that they consider to be top quality will now be a range of products considered 'average' to 'great' and I think some people are having a hard time accepting that Apple needs to do this. Who knows is they are actually going to do this to remain relevant in emerging markets.
kDarling showed the video of the SIII mini and while some of you may look down your nose at it, it a great smartphone and costs 1/4 of what an iPhone does and it adds to your arugment SolipsismX. Stuff that was great 2-3 years ago may now be 'boring' to people like us who spend time on forums dedicated to Smartphones but it's pretty darn amazing to people who have never had one and I know a lot of people who like to test the water at $150 before jumping in with $600.
If Apple doesn't come out with a more affordable phone, they will still be fine. They will always have their fans who will buy their products no matter if it's better or not. It's Apple and that is all that matters. They are not going to go away anytime soon so I don't think there are any worries except for the shareholders who don't like the price being tweaked by certain individuals.