The question isn't "can it be done", but "can it be done well". Windows Mobile 5.0 could do 95% of what the iPhone could do (and a fair bit more). The iPhone did almost all of that 95% overlap better. Better can be the difference between a niche product and a product that changes an industry.
I don't think anyone will argue with you that the touch interface that the iphone came out with was revolutionary. the better comparison is Android vs iPhone. While you say this, the regular phone is still more abundant than the smart phone.