Closer inspection revealed there wasn't just one queue. Because the iPhone is available on 3 networks in Australia (Telstra, Vodafone & Optus) there were actually 3 separate queues, one for each network. On the second floor a row of desks where laid out for each network to handle the activation.
Just imagine what would have happened in the UK or US if more than one network had been involved in the activation.
However, I overheard a couple on the way out laughing that there was no one in the Telstra queue. Guess the Telstra iPhone tariff isn't what the people want.