I think they really wanted to change their image, and the metaverse thing happened to also be a decent candidate for that.
So they're gambling everything on it; Steve would have shitcanned it a year ago and fired everyone involved.
And if so, then why not work on it? The research in AR has already improved the phones as well.
Same thing Microsoft did with their tablet UI forced on all of their operating systems.
One of the more common “problems” people have is that their devices are so much more powerful than they will ever use.
Also, 20 years ago you're talking about desktops connected to the wall, or laptops with no expectations of battery life. The name of the game for phones is use the hardware as little as possible a down clock asap. The fancier the UI, the longer older hardware need to stay upclocked and the more they have to work to hit 60fps (or more) smoothly.
No, it would be a massive net positive. Everyone would love these new opaque buttons that obscure the noise underneath so that you can easily read foreground text.
In light of AR glasses, this thought experiment is even more relevant...
Why not?
VR glasses like the VisionPRO can add a video stream of your surroundings, but they are physically opaque and thus don't suffer from this limitation.