How to enable the iOS spell checker in Mobile Safari?
It looks like it's indeed a hole in iphone's safari. I'm not sure if it was always like that or if it's a new undocumented feature that might soon go away.

But meanwhile you can try using Inspell if you're willing to jailbreak. There's just no other way to fix such an issue: it's either apple or cydia.

Another option, if the error occured only in safari, is using another browser. But that doesn't seem to be this case.