I think photos are a big deal, but IMO it's more about the photo quality. And if you put a nice fancy camera on the phone, suddenly the device gets pretty expensive.
And so while there are people who want "small screen + nice camera". There are people who want "small screen + small price". There are many people who _don't want the small screen_. So you have this phone that can cost a lot of money (in a pretty messy market where most phone models seem to not make money anyways), and you're going to cut off chunks of the market?
So we end up with small screen + shitty camera and specs etc. And people here who want a small phone (but really want a small phone that isn't miserable to use) still are unsatisfied.
I have an iPhone mini, and my understanding is that I lose quite a bit of battery life also by not having the full sized version. The market definitely prefers long runtimes, free from frequent charging, while I need to carry a charge pack sometimes, although just when I expect it to be needed.
And so while there are people who want "small screen + nice camera". There are people who want "small screen + small price". There are many people who _don't want the small screen_. So you have this phone that can cost a lot of money (in a pretty messy market where most phone models seem to not make money anyways), and you're going to cut off chunks of the market?
So we end up with small screen + shitty camera and specs etc. And people here who want a small phone (but really want a small phone that isn't miserable to use) still are unsatisfied.