Why not? Because phones are effing horrible things to try and take photos with. An uncomfortable, cramped, frustrating & unenjoyable experience for me. Sure, you could add some sort of grip to fix some of that, perhaps an EVF, maybe some manual control points, but then what would you have? Yeah, a camera.
I have zero intention or desire to carry a camera around in my pocket, or my phone a lot of the time for that matter, so the size reduction over my m4/3 cameras holds no attraction to me either. I have a small shoulder bag that my camera, wallet, another small lens or two and a small bottle of water reside in, that's all not going to fit in my pocket anyway, so I may as well get comfortable, & use something that's actually a pleasure to use.
Oh, size comparison. One of my G100's that takes most of the photos I post here. With a 24-64mm equivalent lens.