How times change. From Google's Android specification documents in May of 2007 (several months after the iPhone's announcement):
Touchscreens will be supported. However, the Product was designed with the presence of discrete physical buttons as an assumption, therefore a touchscreen cannot completely replace physical buttons.
By the time the T-Mobile G1 was released in late 2008, touchscreen support had moved from an afterthought to a central element of Android — and indeed, the smartphone market as a whole. With the addition of a soft keyboard in Android 1.5, the transition to a touch-focused platform was complete.