Actually, wrt the Snellen optotypes, the entire optotype subtends 5 minutes (I couldn't find the 'elsewhere' you're talking about), but distinguishing them requires that you be able to resolve features 1 minute in size. In fact, on Snellen charts, the letters are carefully designed to reflect this. For instance, on the 'E', the width of each bar of the 'E' is equal to the width of the white space between bars. http://en.wikipedia.org/wiki/Snellen_chart#.2220.2F20.22_.28...
So yeah, if you drew out a tiny "E" (or "P" or "F", I don't think it matters) on a 326 ppi screen a bit more than 12 inches from the viewer's eyes, where the width of each bar was 1 pixel and the space between bars was 1 pixel, then I think that would match up closely with the standard for normal vision, at least in terms of visual acuity for one eye.
Actually, now I can't find the "elsewhere" either and I wonder whether I misread. Having looked again, I agree with you: standard-according-to-Snellen vision means being able to resolve features corresponding to (e.g.) an "E" on a 5x5 pixel grid with pixels of size 1 arc-minute.
Matching that up with the resolution of a display device is still a bit subtle. For instance, suppose you're trying to display an "E" of that size on the display, but it's offset by half a pixel vertically. Result: you get a grey rectangle that's a bit darker along the left edge. :-)
(I think my conclusion from all this is: what Apple are claiming about the iPhone 4 display is about as close to the truth as it's reasonable to expect in marketing materials. That is: everything they've said is at least defensible, but they've put a very positive spin on everything. Seems fair enough to me. And as a pixel-freak who isn't currently a smartphone user, I'm awfully tempted by the new iPhone...)
So yeah, if you drew out a tiny "E" (or "P" or "F", I don't think it matters) on a 326 ppi screen a bit more than 12 inches from the viewer's eyes, where the width of each bar was 1 pixel and the space between bars was 1 pixel, then I think that would match up closely with the standard for normal vision, at least in terms of visual acuity for one eye.