Apple caters to the stylish, the people that matter, people who won't care about the presence/absence of a physical keyboard since they have never owned a smartphone before.
I don't know about the stylish, since that never applied to me. But it did cater to people who mattered - real people.
For you see, for real people the small physical keyboards SUCKED. They had very tiny hit areas, were sometimes hard to press. They took up a lot of space which meant tiny screens, and if you started typing anything not a-z you were totally screwed buy whatever whacky shifting mechanism that keyboard designed had chased to introduce.
I had use blackberries and a variety of Palm/Windows phone devices before I got the first iPhone, and I was REJOICING that at last a mobile keyboard had reasonably sized keys, and I could type really fast - and also type pure numbers the way God intended, with a giant keypad.
Just because you and a few of your kind didn't like virtual keyboards, does not mean the rest of the world agreed with you - including many very technically astute people.
As they say:
If you find such things unpleasant, then I suggest you develop a taste for forced labor because by the year twenty-twenty all that sneer is going to get you is a slot in the underclass boiling corpses.