Look at how long all of the requirement lists posted around these threads are. Some people really want a nice camera, some a headphone jack, some a SD card or big battery etc. I would expect that it's a fact of life in a small phone that you can't fit everything anyone might want, but everyone has a different list of must-haves, making it much harder to make one device that all of the small-phone-wanter market will actually buy.
And price. If you really want some one-off thing, you've gotta pay more for it. Would you pay $2k, $3k, more for a great small phone? Seems likely that such prices would help a lot at getting them made. But in reality, people seem to refuse to pay more than a modest markup over the mainstream model with tens of millions produced. Sorry folks, I don't think it works like that.
We used to have these things in small form factors. Those of us annoyed by where the big companies forced the direction of development are mostly very aware that things have regressed hard.
Worse, they expect it to be cheaper since "it has less screen and battery it must be cheaper to make!"