Most of them don't care about the premium features of larger phones. So the Mini was a weird niche within a niche. Small phone with premium price and features.
The Mini and SE2 were virtually identical in physical size. For the 16e they should have used the iPhone 12/13 Mini body and the 13 Mini screen. Use the 15 Pro SoC with 8GB memory, and the 15 camera. Sell it for an SE price. Now you have fused the small phone and budget iPhone markets.