Not really all that surprised. I don't think it's even down to limitations of the device and services, but more that people have the Internet at home, the office, and they're buying netbooks now which serve as great surfing devices on the sofa, in coffee shops, on the train etc. Why do you need yet another device to surf on? Not to mention most people really are just after a phone. Smartphones are just a bit of bling to them. Must have gadgets but really they still just use them as a phone.
I can understand the iPhone use as probably the buyers of this don't have a netbook (Jobs hasn't released one... yet), and it's a reasonable size screen for basic use (though in my opinion it's still a little small for anything productive). However, is it real Internet use or just a lot of surfing the app store for fart apps?
I prefer the E71, E72 kind of devices. I have a netbook so I'm not going to spend a fortune on something like an iPhone, or even an N97, for something that's more limited than a cheaper netbook for surfing. E series devices, and I guess similar with Blackberry though I've never used them, do what I really want. Make calls, fetch my email, maps, a bunch of office app and maybe a bit of twitter/IM stuff. I rarely need to delve into the Internet browser.
However, does this survey include email use as Internet use? I'd think with the amount of emailer devices out there, especially with the popularity of the Blackberry in the US, that would dent the iPhone figures. If they just mean surfing on a browser, then I'm not surprised at all.
Once the Church of Jobs releases a netbook (or the overpriced tablet), then it will be interesting to see how much surfing still goes on with the iPhone.