With respect, I don't think any of that's true, but it's one of these great assertions of utter donkeyballs that, if thought about, actually leads to the truth.
Wanting a more rugged phone with a decent battery life has nothing to do with "nostalgia", and battery life is actually one of the top complaints amongst smartphone users. So why doesn't the market support that?
Well, because the market is not the same as "most smartphone buyers". Most smartphone buyers do not spend $600 on a f---ing smartphone. Most smartphone buyers spend under $200 on a device with the biggest screen they can find, and then $10 on a "case" that makes it three times as thick.
Who doesn't do this? The people who pay $600 for a phone.
What's so special about $600 phones? Is it the innards? (No) Is it the screen? Uhm.... kinda, but you're looking at a screen that probably cost Apple or Samsung a cool extra $20 to incorporate. Better camera? Ditto.
No, what's special about a $600 phone, which cost maybe $50 more to build than the $60 BLU R1 HD in my pocket, is that has a very pleasing to the eye design.
That is it. That's the difference between a very good $150 phone, and a top of the line Galaxy.
This is why, more than likely, that under $200 phone will actually be more useful than the $600 iGalaxy. It may well have on bezel buttons, resulting in a less awkward UI. It may have a removable battery, or an SD card slot, or both. It may well have dual SIM support.
It may even have a battery that lasts more than eight hours before spluttering out.
The majority of smartphone users want better batteries, features, robustness, and we really don't care about how slim it is. But the majority of smartphone users are barely profitable, with tiny single digit percentage margins. So they literally don't care about us: they care about that minority that's willing to pay $600 for a phone with a build cost of well under $200.
And that minority is the group that wants paper thin phones.