If the expensive device is something people will buy and be carrying with them anyway for other purposes (phone calls, SMS, apps, etc.), then they have no motivation to additionally buy the cheap photo/video-only device and carry that with them.
It's the same reason why, if there was a $20 Facebook device, a $20 Twitter device, a $20 SMS device, etc., they wouldn't sell very well since the phones people already carry can do those things without needing to purchase and tote around multiple other devices.
Well you're probably gonna need a phone anyway, so the question is rather why someone would pay $70 for an extra device rather than $70 extra for a phone with a good camera.
Many of the Micro 4/3s and higher end P&S like Sony RX100 are relatively pricey and could find the iPhone snapping at their heels. The difference in quality could easily be acceptable given the benefits of an internet connected device e.g. Facebook, Instagram, Flickr.
sometimes you are downvoted. it happens.
but more often than not someone upvotes you again, and then it just look whiny, espescially if you are second comment on the page (as you are now).