Even were I losing the ability to recall hundreds of items of contact information, I don't think I would be terribly upset by it. It frees me to think about other things. Prior to PDAs, people used paper personal phonebooks to keep track of their contact information. Yet there was little complaint about memory loss then. Cognitive research has found that distractions hamper memorization ability.
Interest also has a strong effect on recall.
I argue that the memory loss researchers are seeing results from all three of the factors I mentioned working at once. There are too many distractions going on to effectively memorize information. There is frequently little interest in recalling the majority of the contacts in your phonebook. Phone numbers and zip codes have grown beyond the ability of the human mind to easily work with in short term memory. Therefore, we forget things.