A digital camera is a lens and sensor and a lot of electronics, some buttons and dials, a decent screen, software and a case.
Except for the lens and the sensor, a phone already supplies all the pieces so if enough people wanted a better camera in their phone, it should be pretty easy to accommodate them.
Compact camera sales stats indicate that a lot of people want/need compact camera quality, and so a more expensive phone that provides this feature should have an audience. Is that the case?
Edmund