It's positively archaic.
Just to be clear, as the article notes the people standing in line RESERVED a phone. They already have their spot. Apple makes them prove it by standing in line for 6 hours for the television cameras.
When the Motorola Droid was released, in comparison, I remember a lot of articles mocking the lack of lines. Yet somehow they sold 250,000 in the first week. It's kind of amazing what modern fulfillment processes can do, even if it doesn't lead to cult-like turnouts.