As a former iPhone 4 user who lived in a house with poor reception, I wouldn't say the issue was overblown. I practically couldn't use my phone for phone calls. I don't use the phone part much, so it wasn't a deal breaker for me, but I do remember that all my connection problems went away when I switched to an iPhone 5.
The "magic spot" was a big problem -- accidentally touching it dropped calls.
Reception of the iPhone 4 was significantly worse than the 3GS that came before it.
It wasn't overblown at all. They totally screwed up the antenna design, and because of their release cycle it took them 2 years to fix it (with the iPhone 5)
(Also, "a certain way"="the way a normal person holds their phone when they put it on their ear")
You probably live in an area with decent cell tower coverage. If you have good reception, the signal attenuation won't be noticable.
But if you live in an area with poor reception, it is very noticable. For me, it always happened when I was in certain rooms of my house. I'd typically pick up my phone, walk out of the living room to not disturb the others, and then the connection would break up.
No other phone did that. The iPhone 4 had really crappy reception. People made fun of it, and it was absolutely justified.
I still loved the phone. The Retina Display was a breakthrough, and I still think it was the most beautiful phone ever made. But the reception was crappy.
The issue was never that it was unusable if you were touching it anywhere. The iPhone 4 was my first iPhone. I used it for a year - before I was force to upgrade when I switched to Verizon (corporate discount) but my son used it when we switched back from Verizon and two years later, neither of us had a problem.
Besides the one specific case if you held the phone a certain way which was a universal problem, all cellphone reception varies from area to area.
Which coincidentally was exactly the way many people always hold phones. A relative had an iPhone 4 and constant connection issues which completely disappeared after she put some tape around the antenna.
Antennagate was not overblown. It had substantial effects on my reception — to the point of no service. I was forced to use a case, and then forgot about the problem until next time I removed the case. Apple’s software fix, still there to this day, is to make it appear that I have service when I do not.
Edge cases always look bad, a 1% drop in signal quality can result in a dropped call, but is only significant in some areas. Though it looks really bad in those areas.
The reception at my parents house is horrible and I have needed to hold several cellphones in very specific ways for them to work there. This is going back to flip phones though the number of locations phones work has been improving over time.