Depends. Xplane has been ported to iPhone quite successfully. Ok, ported is the wrong word as it is pretty much an entierly new build, but it uses the same blade theory physics and graphics are eons beyond that of the flashy(!) Xbox LIVE examples posted above.
http://www.x-plane.com/index_mobile.html
http://www.youtube.com/watch?v=vaiRLpuwDZ0
I doubt VSTEP has any interest in building a mobile version of the game though, just saying that its not impossible with todays mobile hardware. The best phones today are considerably more capable than the previous generation of gaming consoles.
Take the Samsung Galaxy S for example, its got a 1GHZ Hummingbird CPU (considered more effective per Hz than the Snapdragon) and a PowerVR SGX 540 (200MHz) graphics chip capable of 90 mio. triangles per second (peak). Also 512MB Mobile DDR dedicated memory.
The XBox had a (custom) 733MHz PIII Coppermine CPU, a 233MHz XGPU capable of 125 mio. triangles(again, peak), and 64MB ram. Also worth noting that the SGX540 has been benchmarked at a stable, sustainable 1Gpix/sec at 50% shader load, while the XGPU only did 932 Mpix/sec under similar trials. Also, the SGX540 supports OpenGL 2.0, where the XGPU was limited to 1.4