Phones don't get "slow" on their own. It's usually due to bloatware from upgrades. Many phone cameras are already quite good. The only remaining reason to upgrade is possible security vulnerabilities, but even that doesn't require heavy software. Supporting larger apps is the main reason the system requirements continue to increase, since Niklaus Wirth wrote, "A Plea For Lean Software" in 1995.

But even if people could trade in their phones for a small deposit, how many actually do (and not because they would use it- typically storing it in their drawer is safer than and less time consuming than figuring out how to run a factory reset before giving it to a datacenter.

I've thought about a program where people could drop it off in their mailbox and have a delivery service pick it up (possibly the USPS, but I think they wouldn't want to be burdened with handling lots of lithium batteries).

20 years from now phones will be powerful enough that they can run on capacitors, thinner than a credit card, and deconverged from the multimedia omnibus systems that they are today. Sure it is convenient, but I think the feature adds will plateau.