People asked Apple for this, and when they obliged, it sold so terribly that retailers literally could not give them away. Unfortunately, it seems those who actually want smaller phones are a vocal minority
I didn't buy that because of Apple was so opaque about the mini's battery size. I understand that modern chips require more energy, but damn it if I don't miss my old dumb phone that could last three days on a single charge.
I settled on Pixel 5 because it's the sweet spot between small-ish and enough battery.
I've got about a billion issues with capitalism, but I'm not sure how you think something like this should work otherwise? Product design/development/manufacturing takes a bunch of resources, so it doesn't make sense in any model to make things people generally don't want.