Which device was he making fun of? I think the worst offenders were the windows mobile phones, but that was a bit overstated IMO as you could do many of the styli functions with key combinations, such as closing an app, you were not necessarily stuck with using the stylus on the tiny little X in the corner.
But yeah I think we've established that Jobs was essentially right in terms of not being forced to use a stylus to navigate the UI, definitely agree. But at the same time he may have been wrong in not including the option, although that's very opinionated and obviously the sales numbers favor him. But how do we know that if Apple had a stylus on the first iPhone it wouldn't have become a must have feature on all smartphones like some of the original iPhones features have become.
I forget which it exactly was, but it was Windows Mobile. I do remember that.