I've wanted a 6 foot (rear projection) digital desk or projection screen to replace my intrusive computer screens for the past 9 years. With affordable picoproject technology, it should be possible to make a virtual desk surface as large as my wooden desk. With localized zoom, I could easily read and compare several complete documents side by side. My current dual screen displays enable me to read two 8.5" x 11" documents but everything else must be in hidden windows.
Why spec something for "iphone" when most top tier Android phones have an HDMI out that will run at 1080P (I believe the current iPhone is limited to 720P. Thus, any projector should work with new Android phones (not sure about Windows).
Since this serves a relatively small niche of iPhone users and is never going to be "free", it is unlikely to integrated in iPhone 5.
Actually, $229.99 is pretty cheap for a small DLP projector. You can bet that by far the most costly item in that thing is the DLP chip.