>Should there not be a software solution that lets you select which network/s the phone should connect to?

If I recall correctly german ISPs are trying to find a solution there by embedding the SIM into the device and then branding it on changing provider.

The problems SIM cards are (trying) solve is largely to "secure" the phone network. This mostly boils down who to send the large bill when shit goes fan. (The mobile network is pretty much non-secure, which is why SMS-2FA is not a good solution at all)

(They're also technically a backdoor for your ISP to do whatever they want)

Anyway, the reason SIM cards haven't died yet is probably because there is not much reason to replace them. They're tiny (so Apple doesn't kill it for half a millimeter of thickness) and pretty useful for the ISP to setup certificates and connection details.