HTC has a feature like that for its "HTC Sense" phones.

From http://www.htc.com/www/htcsense/index.html :

"Ever fumbled with your phone because it went off at full-blast during a meeting? Well, don't worry! Now as soon as you lift your phone up to see who's calling, the ringer volume gets lower. Want it silenced completely? Just flip it over."

It also lowers the volume if you pick it up, and if you flip it over during a call, it switches to the speaker. Very handy.

There used to be an Android app that did that. Though I can't remember the name of it, it was incredibly handy.

I lost it at some point and, not remembering the app name, have failed to re-download it.

I think Locale is supposed to do that, but I don't have an android device.

Cyanogenmod (alternate ROM for Android) has a feature where you can silence an incoming call by turning the phone over.

Funny enough, I just saw an app for Android that does this: http://lifehacker.com/#!5599116/how-to-turn-your-android-pho... (God I hate LH's new design)

Unintended consequences seem like trouble here. Like many people I keep my phone in my pants pocket, if it were face inwards when I did that and I sit down then it'd turn off the alerts. Apple would get roasted if they did such a thing.

That seems a little silly to me but I do wish the toggle switch on the side of the iphone was a 3-step silent-vibrate-full instead of just full and vibrate.