Because the smaller form factors generally have a lot of features pulled: whether it be screen pixel density, compass, camera, or battery/phone time, etc.
More and more I love the old style phones: smaller screen and heaps of battery by having a thicker body... but it seems that no-one else agrees with me on this point, so it's always thinner, thinner, thinner and bigger screens.
I'd love to buy an 'iPhone FatBoy 6' or 'Google Pixel Brick'. In a form factor that is thicker, we have more room for better camera optics, bigger batteries, other goodies, and not to mention - easier to hold!
My personal belief is that the future form factor will be a smaller, somewhat egg shaped device that you can comfortably nestle in your palm. It will be thicker, but about the same weight as current phones, so less denser and more shock resistant. You will be able to operate it with just one hand, perhaps with physical controls on the periphery or the back surface of the device. Perhaps it will support a "squeeze" gesture.
That said, depending on the majority use cases, the iPhone 8 camera is plenty.
I get what you are saying though. I kind of wish Google or Apple would license their tech to one of the companies still building large-sensor cameras (Canon, Nikon, Fuji, etc...) to see what could be done with even more data.
How could the market fail to account for consumer preferences in this way? I have a hypothesis: there are only a few manufacturers of top-of-the-line phones, and they want more space for more electronics (including more battery life). If those manufacturers all decide on their own that people want big phones, customers who want up-to-date smartphones will relax their preferences for small phones, and it won't get communicated. And cheaper phones will follow the lead of the more famous and more successful ones. But I think there are lots of other possibilities hypotheses here and the general class of answers of the form "the market is failing to reflect customer preferences" is likely worth investigating.
I generally choose by price point these days and not a single feature.
There certainly are still cheap feature phones knocking about for more basic use cases as well. I just can't quite work out what the author is asking for. I mean okay, the author makes quite a good case for popsockets but that doesn't seem to translate into his other, less salespitchy, more "profound" sounding point about smartphones being "too big".