Not that expensive
Cameraphone problems are (to an extent) down to the laws of physics so its difficult to see how they will be overcome without a radical overhaul of the system - not the incremental improvement Nokia seem to be implying.
In your example, the flash output on a phone is terrible, and that it is without the effect on the battery, so yes, if you want a picture of your mate asleep in the pub you can move closer. This is a situtation people would *rarely* (The Flying Dutchman aside) use a DSLR for. Holding a camera phone still is, on the whole, harder than holding a DSLR still - again laws of physics and the shape of your hands dictate this.
Camera phones can easily dominate the digita compact market - to an extent they already outperform a lot of the low end compacts (say the sub £60 market) - but the chance of them matching a DSLR is vanishingly small. Try taking a frame filling picture of the full moon on any digital compact - yet it can be done handheld with my DSLR.
Physics aside, the advances that allow the camera phone to improve will also be used by DSLR manufacturers so should a Nokia N9999 or whatever one day match the capability of my mid-range DSLR, flash and lenses (10mm - 500mm), the DSLR's available will also have improved by (one assumes) the same degree.
Crucially, DSLRs are not that expensive. Yes a Hassleblad will set you back the price of a car but you can get an entry level Cannon, Nikon or Pentax (etc) for around £300 along with an 18 - 55mm lens. Throw in £10 for a PAYG phone and you can get a great camera and phone for less than £400. Compare that to an iPhone PAYG from O2 for £449.
Phones appear cheap (if you dont get the latest model) because we spread the payments out over the 24 month contracts the phone providers have foisted upon us. Even then the iPhone is £249 plus £25 a month from O2 (total over 24 months £849).
Phones are like photoshop - both are expensive toys unless you are going to be doing that sort of thing for a living.