Samsung have tried this and not sure how many they have sold but general feedback I have seen is its more a Galaxy than a camera, so as always depends where you want your compromises :
main issue for me would be my phone is so small it goes everywhere and if I NEED a camera the one in my iphone is "good enough"
I would like the camera in it to be better but would not like it to increase the size of my phone to compensate
Saw this camera phone the other day and thought 'OK cool concept but it doesn't quite fit right in jeans pockets and probably doesn't have better quality than the iPhone'. But like the rest of the posters it doesn't fall in my usage zone.