No, they didn't. They just stopped typing. Hence, bullshit UI's like Instagram.
> Steve Jobs knew it beat a physical keyboard
Yes, if by 'beat' you mean 'made it too expensive for general use'. But in general it was a huge blow to usability, productivity and general global intelligence.
Your mistake here is confusing a consumer device with something designed for a professional workflow. Touch screen keyboards are, objectively, not faster to type on than a physical QWERTY keyboard. It's like arguing that because my mom got used to a using a cellphone for photography that physical lenses are obsolete.
Again, this is (in my mind) something that mostly only happens in the software industry. A professional racer drives with a manual transmission. When automatic transmissions came out, nobody argued that professional racers were holding back the auto-industry. Meanwhile in the software industry, mention that your workflow benefits from corded headphones, and suddenly you're jeopardizing the future of progress.
I cannot wait until the MBP 2025 with the whole keyboard replaced by the touchbar..
Who needs tactile feedback?