Perhaps I don't understand, but why single out the iPhone? Isn't every phone that receives SMS vulnerable? Couldn't you perform this "attack" with any phone or modem capable of sending SMS?
I remember something a while back where you could spoof SMS to send tweets to Twitter as someone else. I assume that's also still possible?
Spoofing the reply-to or what number a message came from is easy, and has been used before to fake post messages to peoples twitter account for instance, same could probably be done with Facebook if someone has the SMS feature turned on.
I don't remember any of my phones ever having a feature that allowed me to see the Sender/Reply-to for any text message I've received. One thing I do know is that I trust SMS about as far as I trust my carriers and I don't trust them at all. Even if a "bank" were to text me I wouldn't use the information provided in the text to make my next move.
/pedantry
The title got me scratching my head about how IOS even deals with SMS
This is a typo right? I could understand the issue if the reply-to is different from the apparent sender (and hidden), but if they are the same what is the issue? As stated by other commenters practically any SMS gateway allows you to set whatever originator (sender) you like.
