The Apple Watch Ultra is thicker but still within reason for a thing you wear on your wrist. For a thing you're pulling in and out of your pockets and is already straining people's pinkies at their current sizes, I can't imagine a phone that's as thick as the camera protrudes being at all usable by a normal person's measure. The iPhone 16 Pro is advertised as 8.25mm thick. The camera bump is an extra 4.3mm, so flattening it out would make the thing 12.55mm thick. Spread across a big 149.6mm x 71.5mm body, or in the Pro Max case, 163.0mm x 77.6mm, you're adding a lot of mass.
Now I'm curious to do the math.
The iPhone 16 Pro's volume (not counting camera bump, you don't hold that in your hand anyway) is 149.6 x 71.5 * 8.25 = 88,245.3mm^3
Bumping the thickness to 12.55mm you end up with 149.6 x 71.5 * 12.55 = 134,239.82mm^3
A 52% increase in volume.
In the Pro Max you'd go from 104,352.6mm^3 to 158,742.44mm^3
The iPhone Minis sold millions of units and Apple still determined it wasn't enough to justify existing. I'd bet a big brick iPhone would be far more niche. I'd certainly like to see one and hold it in my hands but I think you can see why Apple wouldn't go for that.