I've gotten more entertainment out of Master of Orion II than any other game I've purchased. Close behind is Diablo II. Neither of those games have INSANE graphics (MOO2 for sure doesn't) but both have a lot of replayable fun. I think I paid 29$ for each of them, and I've purchased them both more than once because I lost the discs and boxes and whatnot and just bought them again.
If someone released MOO2 for my iPhone for 5$ I would buy it in a heartbeat.
If someone released the old Monkey Island games on the iPhone for 5$ apiece there would be a good chance I would buy those too. To me the best market for games on the mobile devices is old school games. You could re-release a bunch of nintendo, super nintendo, or playstation 1 game on a smartphone and make bank. Final Fantasy 3 on my iPhone? Hell yeah.