ExtremeTech managed to score an interview with Apple's vice president of Hardware Product Marketing Greg Joswiak where he discusses some of the tradeoffs of the 3G iPhone. He explains that cut and paste didn't make it into iPhone 2.0 just because they didn't get to it, judging "other things to be more important." He also corrects David Pogue who had previously claimed that the iPhone was not technically capable of turn-by-turn GPS, leading us to believe that the limitations aren't technical so much as legal.
Personally, I find it rather strange that Apple considers cut and paste such a low priority feature. I often find myself really missing it, and you'd think it would be worth implementing just to shut up all the people who complain about it. Nonetheless, I suppose this is hopeful in that it suggests that Apple will probably get around to it at some point.