I personally think there is a major advantage to inertial scrolling. It reduces the amount of physical movement and interaction you need to do with the device. With non-inertial panning there is a 1-1 movement ratio, essentially: you need to move your hand the "same distance" that you want to move a web page. Throwing and catching is much nicer. It's rather obvious after you play with it for a while.

Then again, iPhone isn't the first device with this. Picsel browser had this in its browser already years ago, and it worked very nicely with it.