In all honesty, everyone in corporate IT knew damn well that iPhones did not support hardware encryption until the 3GS. Why do you think Schiller made such a big deal out of it during the keynote ("The #1 request from business users has been hardware encryption..." or something like that)?
This is yet one more in a string of under-researched, hysterical articles from InfoWorld that are making that magazine the tech equivalent of US! Weekly.
You're not disagreeing with what the article said. The article claimed (rightly or not, I cannot comment) that the iPhone software claimed to the Exchange server that it did support encryption, then just didn't encrypt anything.
I don't believe for a second that "everyone in corporate IT" knew this and yet allowed their users to connect with iPhones and endanger the security of the network.
Again, I don't know that the article's claims are accurate, but your comment clearly does not clash with the aforementioned claims.
As a Microsoft fanboy it's hard for me to acknowledge this, but I think there is a bit of a problem here on Exchange side's as well. If I unerstand correctly, it asks the device if it supports on-device encryption of data and then trusts that the device claims the truth. I think the problem with this approach is that the security of the network is no longer in the hands of the network's administrators, even though they might have the reason to believe so since they have set up Exchange to enforce on-device encryption even though it can't possibly enforce that in all cases and as the iPhone example shown it, this is not just a theoretical problem.
It prevents honest mistakes. Here, somebody wasn't honest. I wonder what will happen to the guy at Apple who made the decision to set the "Yes, we're encrypted!" bit. (Probably he'll be forced to fire whoever he issued the order to. Poor guy!)
This is yet one more in a string of under-researched, hysterical articles from InfoWorld that are making that magazine the tech equivalent of US! Weekly.