Why FM but not AM? The stations that (still) do any local news are almost all on AM and that's where people would go in an emergency. FM stations might carry the emergency announcement but then they go back to their format and you'd miss the announcement.
Why not HD radio? If these devices are supposed to be state of the art, why use a 70 year old technology?
An emergency voice and text blast to all cell phones in the area seems more feasible and more effective.
That said, my "media phone" has FM. I didn't ask for it. I never use it. It only works with (wired) ear plugs - not Bluetooth, not the built-in speakers, not the built in FM transmitter. The device is an excellent Internet radio (which is why I picked it - a Nokia N85) and a terrible FM radio; it picks up only the stronger signals (about half the stations a little FM headset I got years ago at Radio Shack for $20 receives).
Mandatory FM is a desperation move by broadcaster and shows how clueless most are about the marketplace and about new technology.
What they should be doing is backing improved streaming media player apps and dedicated station apps for smart phones. Some are doing this, notably public radio, but often only for the iPhone (like they don't realize there are other operating systems and most smart phone users use one of them) - but Android, Blackberry, Windows7, WebOS and Symbian (software is available to developers to port apps to various OS'). They also need to restore "dial-up" (lower bandwidth) streams for mobile listeners now that carriers are phasing out "all you can eat" plans and charging for bandwidth use. There is a lot of potential for terrestrial broadcasters with mobile Internet listeners but, as usual, they are blowing it.