It has everything to do with what you said, because you have to understand the business model of Apple. And, if you did, you would want to abandon some of the claims you make about how Apple makes more profits. Overall revenue is not a top tier priority, never was at Apple.
So, I will say this again... they care about profits by margins, and if a certain product doesn't fit into that business model - no dice. Also, the quality has to be there, so if these bigger screens that you want doesn't fit into their QC - no dice.
By the way, you don't get what you want from Apple... Apple puts you into a category, and you are marketed to buy that way for a particular product/service. You bring up the 3.5" screen, and then you don't realize how Apple Developers make Apps, or how they originally made Apps for that screen, and how they have to make Apps now for all the different devices. You don't even get what actually takes place when the 3.5" goes to 4". You don't know the advantage of what the in-cell tech screens allowed for in the iPhone 5.
Also, you asked a couple questions, but my answer will always be the same - Yes, there are many avenues they could hurt their profits by margins stance. There is a lot more strategy than you think. Also, technology advances coinciding with marketing the perception of the product is what Apple pines for. They will never make a product JUST because you need it.
Also, you made a comment that you understand concepts - but, you really don't(or this one at least). And, the more you post on this matter, the more I can tell you are not a businessman. You also said, the bigger screen gives them more profits, but to the contrary, you really don't have a clue about the mid to long-term of a product, especially when it comes to screen size and the tech involved.
Sorry, not trying to bash you - I just don't think you are close to understanding what the next iPhone will be, and now... I don't think you have a damn clue about any future Apple product for that matter.
There is a reason why Apple is the way it is, and why this company is #1 in the world!
Let me ask you a question... Do you think there is more to it than just the SIZE of the screen? If so, what variable does Apple choose when creating a new product? Please clarify on screen size specifically...