Has anyone else had issues with using apex:variable, apex:repeat, dynamic fields, and state not being preserved when actions take place?

I've got the following PoC, a page and its controller. The page shows the First Name and Last Name of a contact (hard coded ID - replace it with one of your own if you're trying this at home) as inputfields. The user can make changes and click a button and the changes should save. However, they do not.

First the page:

<apex:page tabStyle="Contact" controller="TestingPageCtrl">
    <div style="margin-top:14px">
        <apex:form >
                <apex:variable var="obj" value="{!sobj}"/>
                <apex:variable var="fieldNames" value="{!fields}"/>
                <apex:pageblock>
                    <apex:pageBlockSection>
                        <apex:repeat var="fieldName" value="{!fieldNames}">    
                            <apex:inputField value="{!obj[fieldName]}"/>
                        </apex:repeat>
                    </apex:pageBlockSection>
                </apex:pageBlock>

            <div style="width:610px">
                <apex:commandButton value="Next" style="float:right;" action="{!save}" />
            </div>
        </apex:form>
    </div>
</apex:page>

And now, the controller:

public class TestingPageCtrl {

    public SObject sobj {get; set;}
    public List<String> fields {get; set;}
    
    public TestingPageCtrl() {
        System.debug('In TestingPageCtrl');
        sobj = [select ID, FirstName, LastName from Contact where ID = '003K0000009T2za'][0];
        fields = new List<String> {'FirstName', 'LastName'};
    }

    public PageReference save() {
        System.debug('In save()');
        Database.update(sobj);
        return null;
    }
}

In the save() method, the changes made by the user are not carried across. There are some things I've noticed:

• I actually first encountered this in a custom component. Using attributes (and passing the values in from the parent page) rather than variables works - however, there is some loss of elegance in the code.
• You'll notice I'm using a repeat to loop over strings that are field names, and they are then used with dynamic bindings so that the controller can control what fields are displayed. Removing this repeat and putting hardcoded dynamic bindings (i.e. obj['FirstName']) works. Problem here is that my code becomes a lot less re-usable.
• Looking at the debug logs, it looks as if the deserialization is not being performed when the action takes place.

I don't understand why this doesn't work as it is - is there something I'm missing or doing wrong? Do people think this should work as it currently it?

Any feedback and input would be greatly appreciated!

P.S. - I'm pretty sure this is not Summer '12 related as I was having this issue on Friday night before (and after) the upgrade.