As a fellow Kiwi, and a fellow geocacher in my local area, I'd better lend my support.
Firstly, I think it was right for the reviewer to reject the cache. They are only empowered to judge the cache against the existing guidelines. If it doesn't meet the existing guidelines, then it doesn't get approved.
This is a new (and novel) idea; I'll bet it doesn't meet the existing guidleines and it needs a decision higher up the tree.
Cellphones are a readily available technology, that most people have access to, or actually own and use. This isn't a special equipment required cache by any stretch of the imagination.
Compare this with the Wherigo caches that do require special equipment - only certain kinds of GPSr or Windows only PDA's. If we're talking about commercialisation, then should we ban Wherigo for being a closed source, vendor only solution? So that's, + 1 moderation points for using open source technology and openly discussing how it works.
Privacy issues with cellphone numbers are real. But if you feel that way, you don't have to do the cache. One of my nearest to find caches needs a kayak, but I don't have a kayak so I haven't done it. Have I demanded that the cache owner remove the cache because of that? No, I haven't.
In short, I say great idea. Send it up the tree for a higher decision.