Update: Our man Woz has just responded in the comments:
I said plenty to make it clear that I know nothing of Apple's reasons for rejecting anything ever. I told how when I got my white iPhone 4 assembled I tested the flash photos and they did indeed have problems. I spoke of testing flash photos versus non-flash ones and comparing flash photos between my white and black iPhones. I don't recall saying that it was a 'reason' Apple rejected the parts although I had read that.
For the last part, we were referring to 0:55 in the interview video after the break, but now that Woz has spoken, it could've been a joke at the time that got misinterpreted by some websites. They tend to do that with Woz. Read on!
http://www.engadget.com/2011/02/02/e...-white-iphone/