I got INTO the store at 2pm, and got my phone at around 2:30.

It was an absolutely inappropriate launch. I was showing the store manager, on my phone, reports of apple stores all around the nation sending people home to do the activation. They wouldn’t do it.

Turns out the reason wasn’t just the iTunes store going down. In addition, the EZPay service that Apple used to check out and take payment, and do the actual transfer of data and service was down. That’s why it was taking so long. That, and they were only bringing in 2 people at a time.

However once I finally got it working, the iPhone 3G is probably my favorite bit of tech I own. It’s what the original iPhone should have been. It’s freakin fantastic — speed is fast, new apps are amazing, and while I initially thought that the GPS and 3G features were not that big of a deal, the way that they integrate into all the apps is actually a HUGE deal for me, and makes it a must have.

Also, the sync with Mobile Me and over-air pushing is freaking awesome.

Getting back to the point of your post though, I agree. This shows that without adequate preparation, even the mighty can fall on a launch day. Keep in mind though that the servers were only down for a few hours, and by 2 or 3pm on launch day, everything was fine. Good idea by Apple to pick a weekday, so any mishaps affect the least number of people due to work, and as soon as they get all the kinks worked out they can have a smooth weekend.

I don’t know about the withholding of phones though. Apple stores had hundreds, even thousands of units. AT+T stores, however, only had tens or dozens (24-50 by most counts), and were selling out within the hour. Seems like AT+T are the ones who actually are trying to up the demand.