There are are a number of features that are present in higher-end phones which are not available on lower-end ones (though some have started disappearing from high-end models or have become standard, more are always being invented): IR blaster, NFC, wireless charging, AR/VR capability, camera quality, fast charging, battery life, fast wifi, USB-C, OLED display, voice detection coproessor for OK Google / Siri, creating a WiFi hotspot to share WiFi (wireless card can get internet from a network and make its own network - this saved me from a big headache once). And also a fast processor which makes everything faster and improves the user experience.
Blocking usage of certain applications or services from your phone does not reduce the helpfulness those features and does not cripple the device.
Or, to put it another way: most phones these days contain software that exploits weaknesses in your brain to make you do things which do not serve your best interests. This launcher is intended to limit that. Doing so does not cripple your phone; it makes it more useful.
> buying a 500 dollar smartwatch in order to avoid taking out your 1000 dollar smartphone out of your pocket as much
Here you're assuming again that people buy hardware in order to use it. But that's not true; we buy computers because of their capabilities. A good device should add maximum value to the user with minimum time and money investment possible. An ideal device would give you those benefits without you ever having to waste time 'using' it. Smartwatches let you see notifications without having to use your phone, that's the entire point (aside from health/fitness tracking). That makes it an effective device for those who want that, but that doesn't mean it makes the phone any less useful. You may still want an excellent phone for when you do need to do a phone.
Your argument is like saying we buy tablets to not use laptop/desktop computer. Their uses may intersect, but each has areas that it is specialized for.
>Preventing your computer from using popular internet services isn't crippling it,
Right, but that's different from people who are trying to escape from using their $1000 phone as much as possible due to a fear about social media addiction and such things. I don't think these people are the power users like you describe. Power users would figure out how to work around things without crippling their user experience.
>Your argument is like saying we buy tablets to not use laptop/desktop computer
Not at all. Tablets can be a comfy hand-held experience while laptops/desktops are totally a different form factor. They have different contexts. And what I'm complaining about in essence is about people blowing so much money on their fancy phone, and then they end up buying a watch so they can avoid looking at their phone as much because it's oh so tiresome to take out their phone. I'm not saying the devices are useless for the record.
Installing a launcher, like LessPhone, would be a way for me to get a phone closer to what I want. I don't think I would buy a $1000 phone as the starting point, but ideally nor would I purchase an Android phone. The current phone marked is trapped in a duopoly where a large number of people aren't being serviced by neither of the OS suppliers. The ability to customise the product of at least one of suppliers help a little.