No, the resolution of the iPhone display is only lower than the retina at distances closer to the eye than 18 inches. At further distances, the resolution of the iPhone is higher than the retina.
The guy also said the iPhone's resolution was comparable to the Motorola Droid, but the iPhone 4 actually has 50% more pixels than the Droid.
If the demos suck in all other browsers Apple could point to that and say "Hey, told you so.
That's not the message Apple wants to send. If you're trying to promote HTML5 and terminate Flash, what you describe would be a stupid message. All people would say then is, "Clearly I'm not ready for HTML5. Just let me continue with Flash."
Since there is no way I can test them with Firefox I do not know whether they really "look like crap" there.
Poor baby! If you care, you can download Safari. If you use Linux, try the demos on the developer page in Google Chrome for Linux. They work in Chrome for the most part.
The developer page loads just fine in Chrome, but you'll notice the demos don't work as well as they do in Safari. That would suggest Safari supports HTML5 better than Chrome--at least in the ways tested by the demos. So you see, talking about HTML5 compatibility right now isn't really relevant, but it is entirely fair for Apple to want to showcase what HTML5 can/will do and to coax users into using to Safari to see the demos properly.
Oh, yeah, yet another baseless opportunity to dump on Apple.