That’s not quite right. At scale the buttons and knobs are cheap. Having designed many control panels for a wide range of applications, I can tell you that good design is an excruciatingly long and painfully expensive undertaking.
You cannot recompile your way out of a poorly working physical control panel or bad design. You can’t just throw something together for testing and finish it while other teams complete the design of the rest of the car, machine, etc.
As a real example, you might have to evaluate hundreds of button designs for tactile, audible and visible feel. Once sub-selected, you might evaluate over a dozen full scale control panel mock-ups before design lock. Etc.
Touch screens allow you to eliminate a huge portion of what goes into creating a user interphase.