Flickr is stronger IMHO at searching, sorting, browsing, organizing, collaging, archiving, and sharing with loosely-connected groups. The HTML5 uploader is good and the Justified layout with thumbnail commenting is good too (similar to Google photo results, Metro, skydrive).
Will you do all these on your phone? I think yes, especially given the colossal success of Pinterest. People seem to love organizing, sorting, tagging, and collaging. And with the Yahoo phone, photos can be connected with your messenger, calendar, games, and email.
Am I going to search, sort, organise, collage and archive on my phone? They don't sound like everyday activities to me. The uploader and justified view wouldn't even apply to a mobile platform.
People who just want to share photos without all the snooping through the medicine cabinet that Facebook does (though Yahoo may do it too, for all I know).
In this case, the platform exists. This would be moving it to mobile and extending its audience/reach. I'm not big into photography so I'm a terrible judge of this particular domain. But it strikes me that if you are absent in such a large market as mobile, but already have a substantial user base you're risking losing customers as they move to the more convenient platforms. It also presents a barrier for new customers: go with a potentially better, but not on mobile, platform, or the slightly inferior, but available everywhere, platform?
You make good points about Yahoo's content, but they should work on integrating that content with someone else's device.