A protruding camera is not okay. Apple could well do this (see the Touch, and people's fondness for thinness both inside Apple and in the market). But it will annoy me.
It's not a HUGE deal (still better than the big "camera humps" Android makers seem to love). But it makes the device not sit flat on a table, and wobble when tapped. Not okay!
Good thing most people use cases; I don't, except when doing outdoor physical activities.
(Why can't phone companies use a 45-degree mirror or prism, like half a periscope? I know it wastes a pea-sized bit of internal space, but wouldn't it allow a long camera in a thin space? Aim the camera up towards the top, in a tube inside the phone--with a mirror to re-angle the view out the camera window. Or are cameras already wider than they are long?)
Re pockets: my iPhone 5 is too big to get out of my front pocket easily when sitting down, even when caseless. (Of course, ANYTHING is.) And I do both things ALL the time: sit down, and use my phone. A thinner design will help that. A more rounded design could too. A bigger screen and/or lens-protrusion would make the problem worse! But would be nice at the same time. I'll have to hold it in my hand to judge if it's worth it. I do know those bulky Samsungs would drive me crazy in my front pocket.
And no, I'm never sticking a phone in my back pocket!
Also, I would hope that Apple would carefully examine why someone would buy a large form-factor phone, not just crank one out because Samsung does.
I don't think the reasons are subtle: a) to see more or b) to see better. The same reasons Apple has been familiar with for decades in computer screens. Smartphones have been out long enough to diversify.
I don't think the complexity of the decision is about the benefits so much as about the problems--especially:
a) Fragmentation for developers (with domino effect on user experience).
b) Can a big screen be made at the same QUALITY?
But both problems can be solved--not with a snap of the fingers (Android makers haven't managed it) but when the time is right. Maybe an unpleasant compromise is even needed at first (a lesser viewing angle, or whatever--much like Apple didn't want to make the retina iPad 3 thicker, but had to). Something people will hate but get used to. When? This year, I'd say!