They work well for most of us. Consumers have expressed a pretty clear preference for large screen size over any inconvenience of virtual keyboards.
Compare this to e.g. audio equipment which I consider a more 'normal' market system. There's the typical consumer stuff, there's the more professional stuff and then in the high end professional devices there's even subclasses. This seems completely absent in the cellphone market, where every player just follows the rest. At least. that is my impression.