Having a square sensor or a sensor rotating physically is a big tradeoff in cost or complexity. Until now no one cared to make these tradeoffs for large scale selling cameras, and the few attempts to fill the niche didn't seem to be so successful. I think in the photo world it's the same niche level as for true B&W sensors.
I'm baffled as to why iPhone/Android doesn't offer a feature that allows you to toggle horizontal video from a vertical phone. I feel like that'd make 50% of smartphone videos infinitely more watchable.