It's not accurate to say "look at how cool the h/w is" with your cell phone but complain about the "s/w" as if the UI were the only s/w involved. There is so much s/w behind making that phone work, routing calls, cells, protocols, etc. The h/w by itself would be useless. (Then there was all the CAD/CAM software used to design the h/w and its chips and circuits, run the manufacturing process, track production, shipping...).

Similarly with the RPG example; "gee, I still have to worry about poor performace 'cause we've junked up the fast h/w with useless features" - except that nobody wants just paper reports printed out weekly; they want their reports on-demand via the web. That's a ton of s/w behind all that. Do you have any appreciation for the internet and web browsers?

I think that a good part of the problem is the ephemeral nature of software. First of all, you can't see it or touch it, so like with these examples (above) he doesn't realize how much s/w he is touching. It has gotten very much more sophisticated, with layers upon layers of code. If he, as a s/w guy, isn't aware of it, how much less is management above him aware?

Does software engineering have problem? Sure. Would more engineering disciple help? Probably. But since software bits are "free", but hardware costs money to manufacture, it'll probably always be easier for bad software to "escape" (i.e. be released) than bad hardware - especially when the question is "does it work?" and not "does it work well?".

You know, it's not really the fault of the software developers, per se. All your examples have to do with software that has to work with hardware in an integrated fashion, and the companies that make those devices still see themselves as hardware companies not as service companies with solutions that integrate both hardware and software. Until they do, you'll see this disparity between hardware and software advances.
But I agree with you that it would be great if we had the latest software on the latest hardware.

Absolutely agreed! AJAX doesn't do a whit for us if we don't know the basics of UI design...

I agreed: hardware folks are real engineers. Software "engineer" are more like "pseudo-engineers". This is related to the fact that software "engineering" practices itself is "promiscuous. What do I mean by that?.
The answer is that hardware engineering is along either you get it right or you get it wrong most of the time i.e it is more stringent. Software on the otherhand can give appearance of being right and give you some functionality till the bugs surfaces.
Also, you can have fairly sloppy programmers/developers producing reasonably good enough application with today's RAD or IDE tools. Hardware's working is more elementary and therefore takes better engineers to understand and design it well.

There, you have it: software allows Tom, Dick, Harry of lower caliber to code; hardware allows only those who knows engineering well to work with it for most part.

Yes, hardware engineering is a much more formal discipline than software engineering and there are many things we should be learning from them, but while not trying to downplay their achievements, mastering and harnessing the laws of electronics doesn't present nearly the same kind of challenge as figuring out the best way to arrange and present information to us fickle humans. While we still have a long way to go in the field of usability, looking at the achievements of the last 30 years (Lotus 1-2-3, Mac, Linux, Google, and a long etcetera)I don't think software professionals as a whole should be particularly ashamed.