A nice theoretical assertion. But in real usage, finger size does matter.
Large fingers make it difficult by obscuring more of the screen. So if using my thumbs, I can't see any part of the word i'm attempting to position the loop/cursor in.
Also, if a digit is slightly tilted or rolled to one side when touching the screen, large fingers make the change in cursor position larger.
Certainly the iPhone is still perfectly usable. Just don't be so quick to discount finger size as having an affect on usability. If everyone had larger or smaller fingers, Apple would have made the interface larger or smaller to match. The reasons for doing so would have been exactly what was mentioned above.