Yes, the lack of block-delete in answering e-mail has been irritating me too. And somebody in Apple software development must have thought top-posting was a good idea.

Since as you point out it's a lot easier to read e-mail than to write it on the iPhone, I tend to use the iPhone to wade through things that can be deleted unread or deleted after reading, and then do the actual replies on a machine with a keyboard.

One of my students (who worked at an Apple store, yet!) was rather startled when I showed her the Unix command-line shell running on my telephone... (requires jailbreaking).