It's actually less stupid than the state-level bans that allow hands-free devices. Holding the phone isn't the problem; it's the mental distraction caused by talking to someone who doesn't share your environment.
That said, I still oppose this proposal. It's impossible to enforce without invasive hardware and software requirements, and it would inevitably be abused by cops needing to meet their quotas, e.g. ticketing people who are texting or checking maps at red lights.
I think you are mistaken on the "Holding the phone isn't the problem;" (mental distraction seems correct though)
I suggest a quick test for you:
1) Grab the edge of your display like it's the steering wheel
2) with your other hand hold your phone to your ear
3) try to check both blind spots without moving your hands
The freedom of movement is impaired with your elbow in the awkward position. Also when I do it, my elbow and hand blocks my view to the blind spot on that side.
There could always be an exception for a car that isn't moving. I don't have hard data to back this up, but my gut tells me that the car being in motion adds to the danger.
In Alberta a new law was passed that bans all this stuff, including while on a red light.
I guess this is to prevent people from not noticing when the green light goes on. I don't think I've seen any less people talking on their phones while driving though :(
That said, I still oppose this proposal. It's impossible to enforce without invasive hardware and software requirements, and it would inevitably be abused by cops needing to meet their quotas, e.g. ticketing people who are texting or checking maps at red lights.