If by "the best hardware", you mean either clocking higher the same Cortex A9 everyone use, or just throwing in 4 cores, then it's a tradeoff since you'll lose battery life.
I've seen way more people complain about battery life of the 4S than its CPU speed. I think it would be more beneficial for the average user to simply use a smaller die of the A5 and get better battery life than clock it higher and get less.
Number are just numbers and the geeks who brag about their phone's specs is not the market Apple is going after. The "best hardware" is the one that makes your phone actually more useful, it's not just numbers.
The only way to get significantly better performance without trading off battery life would be to change architecture (Cortex A15), but it's unfortunately probably too soon to expect that.
I agree with what you're saying but if Apple shrank components in the phone (screen) and made the phone taller, then they could increase the size of the battery as well. And adding cores without increasing clock speed would keep battery life in check as well, all while increasing the phone's speed.