Well, there are piano, guitar, and drum kit apps available. So in theory, yes. I haven't tried any of the apps though, so I can't say if any musicians would find them compelling enough to give it a try.
As a musician, I must say that this is almost akin to Guitar Hero. I mean I thought the video was good and stuff, but you gotta figure that there's a lot between the recording and the final mix.
Regardless of the phones they are using, that is pretty impressive! If you watch the video I don't think they did any real mixing after the fact. I am pretty sure they are using the macbook the drummer is holding to record the sounds. I have a friend who records all his music on his macbook and it sounds really good.