Did the law mandate USB 3 or just the USB-C connector? You can still have USB-C connector with USB2 data rates.

iPhones don't have USB 3+ because the Lightning connector only has one differential pair for data. If iPhones had a connector with more pairs (USB-C), I doubt it would cost much of anything to add a USB 4 block to the SoC (which they already have on many Apple Silicon SoCs) and wire it up to the connector. Sure, there's more to it, but it's not rocket science.

Presumably, the thinking goes that vendors will use the opportunity to have a large bandwidth.

Sure, but how many people actually use that?

For dedicated professionals I can see it making sense and nothing should prevent Apple from offering new iPhone Pros with usbc.

But that’s not useful for an average person

This isn't an important reason. There's no technical reason that Lightning could not have been updated to support higher speeds, and there's also nothing in this legislation that forces USB-C to magically use a high data rate.