Yup. Today's smartphones (and even tablets) are pretty much rebadged PDAs. The only advances have been a stylus-less UI, a vastly improved image (PDAs are for stodgy business men), and realizing that a package manager is a really good idea.
That's like saying 'the only difference between driving a car and riding a horse is that you feed the horse hay'. Not having a stylus makes a world of difference, both in how easy it is to use (using a stylus sucks donkey balls, and I did it for 10 years (using a stylus, not sucking donkey balls)) and what you can do with it (e.g. swiping is, in practice, impossible with a stylus)
And the switch to non-stylus screens required vastly different screen tech, so it's not like Palm in the 1990's just made an unfortunate choice and they could've switched at any time.
I lost my PDA stylus years ago. Adjusted the setting slightly and my finger worked fine. Palm did not need any radical new tech to hypothetically make touch.
Apple did need a different tech (transparent capacitive touch) for multitouch. But stylus-less finger friendly touch screen interfaces were around for 20 years before the iPhone.
The multiple finger manipulation was innovative and an improvement. (Though the Synaptics touchpad driver permitted basic multi touch years earlier.) Finger-based UI was not innovative and has a long history before Apple.
I don't know about you, but before the iPhone, I hated touch screens. Before the iPhone, most people have only been exposed to touch via shitty kiosks, credit card readers and ATM machines.
I remember the skepticism around Jan 2007 when the iPhone was announced. They said, "Pure touch? No way. Won't work. You need to have a keyboard." I was one them! Even I said, "yeah, the UI is pretty, but the touch screen probably sucks." However, once I played around with my first iPhone, I bought one the next day based purely on the amazing performance of the touch keyboard.
Pure touch phones already existed in 2007 before the iPhone, but they sucked donkey balls. In fact, many of them still do. To downplay the iPhone's touch UI is disingenuous. To this day, the iPhone still has the best touch response on the market. Followed by WP7, WebOS, Android and lastly BB OS in that order. I own an iPhone, WP7 and a Nexus One and use them everyday. Typing on Android is like eating fried chicken with a chopstick.
Well I'm not sure what kind of PDA you were using then, but all the Palm, Handspring and various Linux ones (can't remember what they were called) that I used worked only with a finger when you used your nail, and even then there was no telling what exact 'touch point' the screen/OS was going to use.
It's much like today's TomTom devices. They are advertised as being 'touchscreen', and the UI is designed as such (with big buttons etc) but they're still a bitch to operate. I mistype at least 20% of my interactions with it, and like I mentioned I have a decade of experience with working around finicky touchscreen technology (as much as I hate to admit).
I'm not saying you or anyone else wasn't able to operate a previous-generation touch screen with their finger, but the experience simply wasn't good enough to make it mainstream. For example an on-screen keyboard is/was out of the question on a Palm.
3.5 inch screens were a standard size for PDA screens.