In fairness, I think it's hard to tell to what degree the public is buying it because they're impressed with the iPhone 5 in particular, and to what degree they're buying it because they like the iOS ecosystem in general, and Apple has trained their customers to hold off purchase of the old model for a few months before the new model comes out, creating months of pent-up demand for anything they could release as long as it's not actually defective.
I don't mean that as some kind of indictment -- if you create customers so happy with their products that they'll buy the new one whenever they're due for a replacement, surely that speaks well of the job you've done! But the tradition Apple public relations machine was driven by the expectation that there would be something new and exciting, so everyone felt the need to pay close attention.
The greater risk, I think, is of the media deciding that new Apple releases are no longer special news events worthy of major coverage in general interest publications and dedicated stories on mainstream television news. And instead a new iPhone becomes an event on the order of a new Honda Civic -- lots of people buy them, lots of people buy a new one to replace the last one they had. But honestly, how many people get genuinely excited because there's a new Civic?
I don't disagree. I agree it's hard to know what "the public" thinks. I do think the public is uneducated about the details of the iPhone 5, but I don't think that makes them not buy it.
I actually think most of the public is so uneducated they don't really know the difference between and incremental or large improvements in most cases, so the incremental thing becomes irrelevant because they are uneducated. They only know when a handful of major using facing features come out (e.g. siri, iphoto app release, retina display, new shape, maybe the earpods).
And they know that Apple says "new and better" and they put some trust in that since they don't know how to evaluate it themselves (a lot of the public would have difficulty telling the difference between an iPhone 5 and a samsung phone or a 4s).
Shouldn't it be the opposite? Sure, everyone appreciates some improvement but if you were being a fan of something or someone you need to hinge the liking on something tangible and quantifiable, much like Siri or Retina Display. The viral publicity and urge to buy is centered around that unique point that you will discuss with your friends. "Check out! it is faster!" doesn't seem to be as viral as "Siri, set an alarm for 5PM" to me. But again, my views are obviously biased as I am a techie.
I think that the "uneducated" with regards to Apple products is a slowly dwindling minority. The day of the iPhone 5 launch, I overheard multiple conversations on the street from people that I quickly judged as not the stereotypical Apple fan. But I think this goes to show that Apple products (and apparently their announcements) are captivating to a lot of people now.
Regardless, it's clear that Apple's announcement was only disappointing to bloggers; actual consumers seem to be very interested in the latest revision of the iPhone.
It's the "educated" tech press and bloggers who have a problem with incremental improvement. The public is buying it.