Smartphone cameras are nowhere near analog photos, there is just no way to make a good camera so small.
And oh, I've seen many: I worked at a pharmacy, where one of my duties was developing film and helping folks print digital prints. As digital cameras grew better, cheaper, and more widely distributed (thanks in no small part to smartphones), regular film just dropped sharply.
A few folks care, and will sometimes get a fancier digital camera if they can afford it. The vast majority of folks, though, don't seem to care as long as they have the pictures. Realistically, all a lot of folks want is an instant point and click.