AT&T later in its history, 1960s - 1970s, offered the option of uplines (touch-tone, "Streamline", "Princess", and eventually Mickey Mouse telephones) as service upgrades. So there wasn't no interest in innovation, though I'd agree with the general view that the interest was low.
None of those were real technical improvements over the 500/2500 set however, they were upgrades designed to please the customer aesthetically.
Meaning, all of those sets performed more or less (in some cases less, specifically in certain special service applications) identically to a 2500/500, and at least one of those was a 2500 in a mouse shaped box.
Touch-Tone was actually a value add for the telco because it reduced register holding times in crossbar switches, and could reduce the amount of common control hardware needed, yet they still charged more for it (and the service too)
I'm really not going to try to defend AT&T's specific level of innovation.
I'm noting, however, that the possibility of offering a range of hardware at a range of price levels and allowing for volitional subscriber updates is possible, and was practiced.
I can see why consumers and consumer advocate groups don’t like this.