There is so much time, effort, and physical waste that is generated by slightly redesigning phones every year purely for the sake of making sales (as opposed to meaningful improvement upon the existing design or introduction of a new hardware feature). Think not only of people upgrading for the sake of it, but all of the cases, screen protectors, and other assorted accessories cast in plastic for previous models that are garbage now.
It would be nice if we could just space these things out to 5 years or so now, because that's probably how long it takes for anything to change enough to justify a new model.
The annual incremental release cycle is fine—what’s silly is thinking phones need to be upgraded every year.
Try that and monitor your quality of life. See if you can avoid therapy.
It's not that people think they need to upgrade their phones every year, or two, or three. It's that the phones are designed for short usable life on hardware side, and on software side, neither first-party nor third-party developers give a damn about performance.