I could imagine a secure location service that allows your phone to compare its current expected position with other nearby phones' expectations of their positions. If it's over bluetooth or wifi, the positions should be within meters of each other. This could provide an input to a kalmann filter type position estimator to help reduce drift as you (for example) walk down the street.
I think there are both feasibility and practicality issues with the cooperative estimation scheme you are describing. Without already knowing where the phones are very accuratly there will be a lot of noise. Would need a lot more detail to really understand what you intend but first reaction is that it'd be very difficult to do well.
If you really care you could sketch out what exactly it is and how it'd work for yourself for a couple of devices (or more) and see what issues you uncover.
