The only thing stopping people from running Android on iPhone Hardware is that no-one can be bothered installing it.
Putting Android on an iPhone is only marginally more difficult than updating your Android Phone using CyanogenMod.

When Mac's started using Intel Chips and Windows-on-Mac-Hardware was viable, lot's of people wanted it. Unfortunately, due to Windows Closed-source nature, it wasn't compatible with the Mac's EFI BootROM.
One person placed a Bounty for the first person to create a way to dual-boot MacOSX and Windows. No-one succeeded.
Apple Launched BootCamp Beta for Leopard. Snow Leopard had BootCamp built in. So does Lion.

If people wanted to run a custom ROM on their iPhone, they could. The facts are that iOS is the pinnacle of Mobile Device Software. The iPhone is the pinnacle of Mobile Device Hardware. The greater Majority of iPhone users have no interest whatsoever in putting an Alternative OS on their iPhone. Since you can buy an Android Phone for $40 in the bargain bin of your local corner shop, no iPhone user really needs to.

Haven't Google stopped Nexus S builds of ICS because the device isn't powerful enough.
So much for Nexus-branded phones getting prompt software updates.

I would buy a Metro Phone 7 Phone before I purchased another Android Phone.
At least I know I'd get software updates for more than a few days.
The fact that Nokia made the N9 really does sell it for me. A Smartphone that can also be used as a Phone? No-one has seen one of those since the Nokia 9000.

I have had an iPhone 3G, 3GS, 4, 4S and quite a few HTC, iMate and Samsung Smartphones. None compare to the audio quality of a trusty Nokia 5110. Much more convenient for accessing information on the go, but mediocre-at-best for Phone Calls.

90% of Google's Mobile Ad Revenue comes from iOS.

The "75% market share of Android" consist of a minuscule quantity of Real Android Fanboys and a huge proportion of little old ladies who thought they were buying an "Eye-Phone".

It's easy to tell the difference between a JooJoo and an iPad.
The iPad actually exists.

Saying that Apple copied the JooJoo, when the iPad is just an evolution of the iPhone (and is even rumoured to be a precursor to the iPhone) is insane. That is like saying a 2011 iMac is a rip-off of a 2010 Asus EEE-Top ET2400IUTS (in an alternative world where Asus never built it).

It's not just the colour of the boxes.

Touchpads came in a white box which slid apart like a DVD Box set. The image of the device was isometric. There were dark HP logos and Touchpad type everywhere in black.

The Samsung Boxes may be the same colour as the iPad Boxes, but they also show the device Full-frontal, with a Grid of Apps (like the iPad Boxes).
They had Silver Ink (like the iPad Boxes). They run a version of Honeycomb that has been modified to look more like an iPad (seriously, Honeycomb is a nice interface and doesn't need Samsungs Crapware).

Getting to that, The Galaxy Tab was so underpowered that it can't run both Ice Cream Sandwich and Samsungs Crapware at the same time. Therefore, Samsung are rumoured to not make ICS available for it. Thank goodness for CyanogenMod, "preventing your brand new Android device from being obsolete before you bought it".

I don't think Apple would follow any of these directions.
Apple are all about making great products and selling them. According to their design methodologies;

1. The Free-for-all App model is broken. It exposes the user to unnecessary risks to their privacy. They aren't likely to open the App Store any more.

2. The Android App Model is broken. There isn't enough Modularity to Android App Design. What modularity there is doesn't sit well with the benefits of iOS. Interpreted code is too inefficient for a mobile device and without deep integration with the iOS APIs, and App would behave very badly.

3. Apple's subtle, classy advertising isn't the type of advertising that suits a Bombardment.

A LOT cheaper is what the Amazon Fire is. It may take away a small chunk of the iPad market, but it is also going to take away a huge chunk of the Android Tablet market.
A LOT "better" could be a decent ICS. Unfortunately, I don't think Samsung, Motorola, Acer or Asus are going to be able to push out something like that in the next year. They have been too busy trying to copy the iPad than build a product that stands on it's own merits.Through some miracle of R&D, they may *announce* something at CES, but the iPad 3 *launch* could only be months away.

In 1990, A typical desktop computer had an Intel 80368SL and Trident TVGA9000 card.
In 1999, A typical desktop computer had an Intel Pentium III and integrated Intel video.
Since before 1995, some computers started having more powerful graphics card for 3D Gaming and Visualisation, but they were very rare. There were also monitors capable of displaying more than 1024x768 but they were expensive and not very common either.

http://www.computerhope.com/history/19902000.htm

Up until 2006, when Vista was released, most systems will had a Single-Core Processor and underpowered Integrated Graphics.
Vista (despite it's many flaws, and in some cases, because of it's many flaws), changed that. Dual-Core and 64-bit processors became ubiquitous and Accelerated GPU's from ATi and nVidia became necessities, rather than luxuries.

I shouldn't have said "all Windows Computer Hardware".
I should have said "the greater Majority of Windows Computer Hardware".
My Apologies, it was a gross generalisation.

Regardless, Developers only had to test against a handful of Systems. Nowadays with technology like DirectX and OpenGL, even high-end games benefit from the extra abstraction and shouldn't have to be too concerned about the specific Hardware.

Samsung, Acer, etc licence the OS from Google. Any poor business practices they make in Android's name negatively affect Google.

Even the Kindle Fire is going to have a negative affect on the public's perception of Android, and it didn't licence the OS from Google and only use the Open Source Components.

Public: "Why should I buy a $600 Transformer when I can get a $200 Fire which run's Android Apps?"
Public: "This Kindle Fire is crap. Ergo, Android Apps are crap, Therefore, I'm going to write off the $200 I spent on the Kindle and write off all Android Tablets as well. Where's the nearest Apple Store?"