Sherilpod, I reached the same conclusion you did - that the drop-out problem is limited to those who listen to calls at lower volume settings, and those on calls (such as conference calls) where the distant parties can be speaking quietly. The problem is masked by noisy environments - where you blame yourself, not the phone, for failing to understand what they said, then you turn up the volume, and they shout louder the second time around.
But it is a real problem nevertheless. I am often on international conference calls, and like you, don't want to be deafened by running the sound too loud.
Here's my analysis of the bug. There's a threshold. Sounds below a certain level are attenuted. That's all fine, but the bug is that such a threshold should measure the full-strength signal, before the volume control. Apple is applying a threshold after the volume control. Thus the lower the volume setting, the larger the proportion of "good" sound falls below the threshold and is attenuted. If you listen carefully and in a quiet setting you will hear that the signal is still there, but is so highly attenuated it would be impossible for a normal person to understand the words.
I sure hope Apple will fix it. I suppose it may not be top priority for them since so few people seem to notice or care. I wrote a letter to Tim Cook in hopes it gets through to their engineering folks that there is a flaw.
See my earlier post on how to reproduce the problem with 100% reliability by calling the recording at +1 (877) 654-4400 at the lowest volume setting in a completely silent environment. I have reproduced it on all three US carriers, on six different handsets, including with the latest released iOS as of a few days ago. It's real. It's reproducible. My iPhone 4 doesn't have the problem. Here's hoping they fix it. I am looking forward to buying an iPhone 5 if and when it's resolved.