Hi,
These are some good thoughts, but I see other alternatives.
1. They use run the iPhone Apps in a seperate compatibility layer like they did with Classic or 32/64 bit compatibility. They could offer to let the users decide if they want to upscale or keep the same resolution by a simple maximize/minimize icon. They could offer free upgrades by the game vendors for better graphics compatibility or even a special API that would automatically upgrade games with the vendors consent.
2. They could have a partitioned tablet and it can ask the user if it wants to switch to iPhone mode where it will automatically list the iPhone Apps. Then you don't have to worry about the incompatibilities of emulation.
3. You can allow the iPhone to plug in to the tablet and have the tablet run as a larger screen of the iPhone. This would be like target video mode in the new iMacs. It would be awesome and promote more sales of the iPhone or iPod Touch.
Apple is creative and looks long term. It is a mistake to underestimate their desire to sell.
Regards,
Chimac
I Dream of Tablet, Part Two: App Store Ecosystem