The 5x tele is workable if you can get enough light into that itty bitty lens. The examples people have posted here are good illustrations. Lots of light = passable 5x shots. But if the scene is not fully lit problems arise. The 5x lens is very apt to give you a dark, grainy, fuzzy image that just isn’t usable.
I agree with the OP. A 5x tele is basically a useless specialty lens that doesn’t represent much value. The ultra wide is the far better lens on iPhone and can be used in a much larger variety of light conditions while producing good results.
The problem, as already stated in the OP is that the vast majority of iPhone owners don’t know what a prime lens is, don’t know that their phone is using digital zoom when they pinch-to-zoom and don’t know the difference between a telephoto lens and a zoom lens.
Regardless, to me a MUCH bigger issue is the inability to set a custom white balance. iPhone is horrible at achieving accurate colors. This could be easily rectified if I could use a grey card target to set custom white balance for each shoot. But no. As always, Apple knows best. No white balance for you.