If you, someone experienced with "real" camera gear, were "astonished" by the iphone 7+ pictures and thought they were taken by "five grand worth of gear", then for the average person further gains are going to be unremarkable.
That's kind of a strange argument, no? You're saying that if experienced photographers think the improvement is large, then average people can't tell the difference?
That's very strange.
Have a look at e.g. this paper from Google. http://www.hdrplusdata.org/hdrplus_preprint.pdf These changes certainly count as "astonishing" to me (let's say, an "enthusiastic amateaur" photog), and I think you'd be hard-pressed to argue that this tech is insignificant to the average user.