I suspect Apple's iPhone thinness requirements include "device is comfortable to hold and use in a thick case". The camera bump has gotten gradually larger partially because they can be a cut out section of such a case, without taking up additional thickness and making the cased device less comfortable to hold and use for long periods.

The most obvious subtraction to preserve device size and simplify internals to allow for other features was the headphone jack. Thus the "courage" remark - the teams (all the way up to the executives) were willing to have a device change that may people would be upset about because they felt it was the right tradeoff to make long-term.