I'd have thought for most people it's an incentive like better car engine, they don't really need it, but they can say "I've got the latest 20Mpx" (when really it's probably the quality of the glass, flash, processing that's most important rather than raw megapixels).

I've been looking at cameras again, I want more control over focus, better ISO, but don't want to pay so much for a better phone because the glass and sensor size is limiting.

Not really - I take most photos of my kids with my smartphone - the quality has been increasing dramatically in the last 5 year and these photos are memories that will last for 50 years. So it’s definitely worth it for me.