I downloaded that Geometry Wars clone as well. It's a game called PewPew. The controls are a little iffy but after playing a while you do tend to get somewhat used to them. Overall it's a good game, and I don't fault the developer for the control issues.
That said, smart phones are powerful enough to handle complex games. We know this. Most have seen the Kal-El "Glowball" demo that came out recently (if you have not, youtube it). It shows off what the nVidia Tegra 3 quad-core can do, and it only goes up from here. But we need controllers. Desperately.
First, though, we need APIs for it. For the iPhone and Android each, we need an API very similar to DirectX's DirectInput. Something that defines a structured set of rules and specifications for controllers and how various controller functions are handled (thumbsticks, D-pads, buttons, etc.). Once that's in place, then you start having companies develop compatible controllers for it, and have a certification system in place. Then, if you're a game developer, if your game needs to use a more traditional control set, encourage developers to support the platform for the system. In other words, make a gaming API that is very tightly integrated into the OS itself (like DirectX is with Windows), and include a rich, highly-functional input API to handle gaming.
Do this, and gaming on mobile devices will soar, and it won't just be touch-based games either. You'll have real, honest-to-goodness traditional gaming the way it ought to be done.