XS is noticably heavier and larger than a 4.7" iPhone. I don't think many people want an updated 4.7" iPhone with bezels and Touch ID.A bezel-less version at that size would be the iPhone XS. That would only make sense for a "budget" phone if the display is a "Liquid Retina" LCD display like in the XR and maybe with an ultrasonic fingerprint reader trough the display to bring costs down. A smaller XR is what many people had hoped for.......
Instead they need to give us something with a smaller footprint of the XS with no bezel. There are rumors next year of a 5.42" iPhone. Perhaps that is it.