The average person who just wants things to work will buy an iPhone. They are not going to want to mess around with Android in it's current state. Watch what happens when the iPhone is on other carriers besides AT&T. it will be the same as in europe where Android has much lower market penetration because the iPhone is on multiple carriers.
See, this sort of statement already (IMO) misses why Apple has already lost. Even if the iPhone came to Verizon in early 2010 (and I doubt it is, for reasons too lengthy for this post, but either Apple is shipping a smaller tablet on Verizon this spring, or they are letting Sprint buy out the last year of exclusivity to AT&T - either way VZ doesn't need the iPhone anymore and won't give in to Apple's control demands).
But even in that best case (or worst case, depending on your viewpoint) where a Verizon iPhone shows up by the end of January in stores everywhere, it will still be too late. All current devices will have 2.2 by then, and Gingerbread will be out (and probably rolling out to phones already) meaning 3 major OS revisions in just over a year. The iPhone OS would be more or less identical to the current one. Several Android phones with hardware specs that will make DX owners like us green with envy will have shipped by then on all major networks...the iPhone would be essentially identical (aside from the radio band) to the current one.
Along with Gingerbread (if not proceeding it) Google will be launching its music service, helping to break the iOS dominance over the mp3 ecosystem (at the least it will provide a solid alternative, and if they implement a cloud-to-anywhere system that is compelling, people might even switch just for that) and now it appears that Sony is coming out swinging with a Playstation-branded Android game phone and market update that will also let other people with phones of sufficient power to play those games.
Apple simply can't innovate at the same rate. They have some truly gifted designers and engineers, but they can't produce new hardware and software at the rate that Google, Sony, and the entirety of the high-end smartphone makers do.
Don't get me wrong, the iPhone will keep being profitable to Apple for some time to come, but they aren't going to reclaim the sales lead, and most likely will only fall further behind Android as time goes on. The benefit to a closed garden is control, design consistency, and good per-unit profitability. The cost (especially as time goes on) is marketshare, and making powerful enemies who have every incentive to champion the opposing product to further their own interests.