Only sub game I'd see working would be a 3D underwater exploration game from one of those little yellow submarines… (…hey that's not a bad title for a song.)
If you could tilt the screen to look around your window of view, that could be very interesting.
From a technical standpoint, it's not actually that difficult to perform on the iPhone. You can render moderate-sized 3D environments using SIO2 - http://sio2interactive.com - and, as it's a submarine, you won't have many issues with framerate. You've also got the advantage of being able to have a relatively low fog distance underwater.
My suggestions might be taking your idea in a completely different direction, and hey, it might only appeal to aspiring marine biologists, but at least it would make a nice tech demo!