I think we can agree that most people will never need anything more than a midrange processor for average use and only overbuy due to marketing.
Speaking only for myself, I've become accustomed to the snappiness of higher end processors and high refresh screens. All the screens I use on a daily basis are 120hz+ and even though I don't game on my phone, the benefits of having a high refresh rate screen has become a nice quality of life feature for me. I still have a 60hz phone that I test as a degoogled phone and the difference is quite noticeable.
A high-end processor helps drive apps at those higher refresh rates and also just as important, it can brute-force some of the less-than-well optimized open source apps I rely on to interact with my self-hosted infrastructure.
I can live with a lower-end phone but I'm willing to pay a bit more for features and performance that meet my standards.
TSMC has been raising prices on their high-demand nodes but there are rumours of them finally cutting prices on their 6 and 7nm nodes which should reduce the manufacturing costs of the current-gen consoles. Whether it happens in time to make a difference this life cycle remains to be seen.