You have to keep in mind the cost. When you see a phone with an "outdated" camera, it's usually because the manufacturer/carrier is worried that the additional cost will prevent them from moving as many units as they can. Obviously, most people would rather have a better quality camera but are they willing to pay for it?
“The Pixi -- a sleek, tiny device -- seems clearly aimed at the only market Palm has recently enjoyed unfettered success with: the Centro demographic.”
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You have to keep in mind the cost. When you see a phone with an "outdated" camera, it's usually because the manufacturer/carrier is worried that the additional cost will prevent them from moving as many units as they can. Obviously, most people would rather have a better quality camera but are they willing to pay for it?