Nah, your sarcasm detector isn't busted -- we genuinely are surprised that Apple has lifted the iron fist and allowed a piece of hardware on its handset to be used for something other than Jobs himself intended. It may seem trivial to those who haven't witnessed Apple block the most sensible of programs in the past, but allowing applications that enable end-user control of the LED camera flash is a pretty big deal. It's one of those "sad, but true" moments, you know? As of now, the affordable (£0.59) Flashlight - For iPhone 4 and even more affordable (zilch) LED Light for iPhone 4 can be downloaded directly from the App Store and used to activate the LED whenever you darn well please, and for reasons that we needn't mention, we'd suggest you go ahead and grab one... pronto.
Update: Another free option -- Power Light -- just splashed down into the App Store.