jQTouch has a great looking website/demo and was very exciting a year or so ago, but I'll be happy to see a robust alternative. After having used jQTouch to implement iPhone-specific views for a couple sites, I won't use it again.
jQTouch could have preempted the possibility of jQuery Mobile being viable in the first place, but it stagnated instead. The jQuery team can't be blamed for that.
I'm guessing that jQTouch maybe never had any ambition to address the need that jQuery Mobile is hoping to address. It was clever, and it was first. Credit where due. But it was always a toy. Modern mobile JavaScript frameworks can't ignore the need for a true touch event model. Thank god John and his team are writing one, because (1) we pretty much know it will be good and (2) I sure as he'll wasn't going to write one.
jQTouch could have preempted the possibility of jQuery Mobile being viable in the first place, but it stagnated instead. The jQuery team can't be blamed for that.