No one wants your smaller devices. Why do you assume people want what you want? Most don’t, they’ve tried it and no one buys them, that’s why they don’t make them. The market has spoken.
The subreddit is filled with posts of people's devices breaking even on the first day of purchase. It's hard to know what the actual breakage rate is but it's certainly suggestive of problems. It would be crazy if Apple with all their typical polish managed to miss some major flaw.
I feel this is worse than Nintendo’s “solution” to Switch joycon drift - giving us in the USA (for now) free refurb/fixes which must be cheaper than admitting there’s an issue, but still a cost/brand trust problem.