Giving anything that comes out that late in the year this type of award is ludicrous. All this proves is Time does nothing more than watch media hype and check sales figures when granting these awards.
If the Droid was truly groundbreaking, then yes, it deserves the award. Unfortunately, it is not; it is merely the first with Android 2.0. And, while being a well built phone, this is not a deciding factor; ALL phones should be built to this level of quality. The American public is, for the most part, nothing more than a herd of sheep that has become willing to accept whatever is handed them.
Lastly, my niece, who is an educated person, asked me if she should get a Droid, to which I told her yes. She was, however, totally surprised when I explained to her that it is not the only Android phone on the market. She, like so many others, are led to believe by the marketing hype and lack of mention of Android on other commercials (wake up HTC), that the Droid is the FIRST and ONLY Android phone out there.