Interesting. What's you source on that? I didn't see any reference to that quote that puts it into that context.
The context is that all other touch screen devices of the period REQUIRED styluses for any detailed work, Tacticalogic. The iPhone was the first that did not, because it was designed as a multi-touch device and being capacitance touch was FAR MORE accurate than any that came before it. If the device required a stylus to use the touch screen for anything except gross touches, it was a failure from the get go. Steve Jobs original objection to styluses with devices was spoken in January 2008 in the presentation of the original iPhone:
"Who wants a stylus? You have to get 'em, put 'em away, you lose 'em, yuck. Nobody wants a stylus. So let's not use a stylus. We're going to use the best pointing device in the world. We're going to use a pointing device that we're all born with - born with ten of them. We're going to use our fingers. We're going to touch with our fingers." Steve Jobs — Keynote presentation of the new iPhone, January 9, 2007