I'll give you a user story. I have DND automatically set for 10PM. I'm working in my office downstairs at 11PM and my wife sends me an iMessage asking for a glass of water. But my screen is asleep and I never see it. So I wrap up work and go upstairs, missing an opportunity to serve my wife, clear proof that Apple hates marriages.
All joking aside, it's a pretty trivial thing to do. They already do it. Just add a tiny lightbulb to the front panel and route the signal that's currently going to flash to said tiny lightbulb. While it's not a deal breaker for me, it's a good idea...less intrusive than dings and waking the screen and often gives you exactly the info you need in a simple way (once upon a time Apple was all about simplicity).
And while you're technically correct that one solution to this is the Apple Watch, I really hope some Apple exec didn't say, "You know, we could add a $0.06 LED notification light, but let's instead make people buy a $400+ watch to get notifications...solved!"
