Perhaps "scale" wasn't the best word. I'm not talking about resolution or anything so petty. I'm talking about using the limitations of the iPhone to work out what the actual important content is for your site and then use that as the basis for the site no matter where it's being shown. As a designer, you should be asking yourself "if this isn't important enough to make it to the iPhone version, why have I got it on the "real" version of the site. It's the principle of throwing stuff away until it no longer works, then putting the last thing back in.
A good example is the new Engadget site. It's a little sparse on the iPhone, but it's actually way easier to use than the monstrosity that is now their home page in a desktop browser.