I think the problem is that doing what you said is insanely difficult. Look at the Essential phone for a recent example.

Also if Android wasn't a security and privacy nightmare.

Not to mention, I don't think Samsung dislikes the margins. Apple's phones being more expensive helps push Samsung's device costs up too, so they can make more margin. I doubt they want Apple to fully leave, they are potentially making more money just by getting to sell their phones at a higher cost when they can potentially make them even cheaper than Apple makes the iPhone.