Those buttons require special drilling and machining steps on the case. Removing those speeds up the production of cases by a lot which equals cost.
Mechanical switches are way more expensive than huge areas of silicon chip. It's not even close.
Finally, solid-state touch sensitive stuff effectively never fails. It never gets dirty. It never wears out.
Does it have Heisenbugs and screwball failure modes? Oh, yeah. I imagine triggering them with gloves on will be a nightmare, for example.
But, it's okay, people will wear special Apple gloves in order to use the advanced feature of their new phone. When something on an iPhone fails, it's obviously always the fault of the end user, no?
