Not entirely accurate, but you have a point.
Iowa's main role is to be a winnower. The Iowa straw poll killed Pawlenty. It has now pushed Bachmann into conceding today. Somebody is going to end up being the “social issues conservative candidate,” and Iowa has already made sure it won't be Bachmann or Pawlenty. It also looks like Iowa caused Gingrich to decide to go on the attack in New Hampshire and that is not a bad thing.
Another critical purpose of Iowa (and New Hampshire) is to force presidential candidates to campaign the way people used to do things ... door to door, restaurant to restaurant, VFW Hall to senior citizens center, hometown parade to county fair. Making a presidential candidate actually connect with people as if they were running for city council, mayor, county commission, or the state legislature is important because it allows people with little money but lots of grassroots support to have a real voice.
Other important factors for Iowa include that it forces presidential candidates to pay attention to agriculture issues. I've never been a farmer and nobody in my family has farmed for well over a century, but I've spent enough time in rural America to believe that's an important part of the American economy that gets ignored too often on the national level because farmers, unlike large corporations, tend to be small businessmen and don't have effective lobbying organizations at the national level.
I fully agree that places like South Carolina and Florida are better predictors of the eventual nominee, but they're better predictors only because the weaker candidates were culled out earlier by Iowa and New Hampshire.
Great overall analysis, Darrell. I like it.