The volume for cameras like this was always low. Even in the days before you had a camera on your smartphone, people were buying Polaroids, compact cameras with a small lens built in, or disposable cameras. They weren't buying something more complicated unless they were hobbyist photographers.

Those compact cameras with a built in lens still funded the R&D for the expensive cameras. They can all run the same OS and software, etc. Smartphones have continuously chipped away at the bottom tier of cameras to the point where even hobbyist photographers use smartphones. And only the absolute top tier of very expensive cameras still exist.

Not hobby. Taking photo is always key to life for many.

Before phone for major event like graduation, wedding and baby birth people do buy one camera with one lens for the occasion and keep it as a family heirloom like. And even students gala and performances. Whilst a lot of point and shot, slr and later dslr are common. The key it is not a hobby to them but a life even to record.

Unlike people like us canon and nikon found it hard to sell the second lens or even second body.