But older versions of Android prior to Material Design did not have excessive whitespace. So we had touchscreen devices in the past and we could still design good interfaces for them that were not dumbed down in this way.
I think it's probably a marketing drive to cater to as wide an audience as possible, to the lowest denominator of user. They probably made a rational decision to do this because it would increase revenue by simplifying the interface. So these devices went the way of TV in the end.