I understand that Apple did not make enough money to make it worth their while to continue the iphone mini line. However, it does seem like there is a profitable business for someone there given how beloved it was/is.
I only traded out my iphone 12 mini just recently for an iphone 16 pro (likely the last apple product I will ever buy but thats another story) and aside from the camera it is basically the same. Just heavier, awkward to hold and slightly worse designed.
No major player wants a smaller screen because it has downstream impacts on the pipeline of addictive material and ad pixels they can stuff into ocular nerves.
Like it or not, Apple keeps cancelling smaller phone lines because they don't sell well. That's it. If they sold really well then they'd keep selling them, but they don't.
I would also love more capable small phones personally, but I can't deny that people overall don't seem to want them.