I prefer reachabilty, and have no problem reaching the very top edges of my SE with my thumb. At least no more trouble than reaching the top of the current display. Smaller hands can't even reach it now. YMMV. And why wouldn't they add a notch? If that's the direction Apple is going with all of their phones, as well as face recognition, then why wouldn't the "SE" be updated with it at some point?
The SE has Touch ID, which at one point was a top of the line feature in the twice as expensive 5s. The features of the X won't be $900 forever. If 3D Touch is even still a thing, I'd expect the new SE to maybe get that, and then eventually bezeless with a notch, or whatever Apple is pushing next.
But, I disagree that Apple would never offer a top of the line small phone. Apple is offering a small phone now, which had most of the features of the flagship 6s at the time, for half the price of the 6s the time it was released. If Apple offered a small flagship phone, even if they only got half as many customers as the SE, that's still substantially more money for what is essentially a compact version of something they've already paid the R&D for, and gives them a model, like the iPhone 5, which they can also squeeze potentially 6+ years out of. So any effort by Apple to offer a high end model, is amortized over the projected life of the model, not how many rich customers choose it as an option during its premium release year.
What doesn't make sense is redesigning a one-off budget phone at all. With the exception of the 5c -- which was just a cheaper plastic version of the same case they already engineered -- Apple has never done it. They've always invested in the top of the line model, then depreciated the design over time, selling it for less -- indeed the 5c was merely a variation of that. It's a business model that seems pretty effective, so I'm not sure why they would change it now.
So if Apple offers merely a budget replacement for the SE with this rumor, then it will likely just be a larger spec-bumped 6, which tends to be more popular anyway, and keep around the original SE as a truly budget phone, with no spec bumps at all. Unfortunately that doesn't help small handset customers at all. So suddenly reachabilty no longer is even a factor at all, making a bezeless phone far more desirable for those who have reachabilty issues, over having no small-sized phone at all.
It would be in Apples best interest then, to serve their customers demand, to likewise offer a minimally compromised design rather than continue offering two designs, neither of which fully serve their customers needs -- even if that means offering a premium 4" phone that isn't very successful, as an inexpensive prototype for the next generation budget phone which engineering will be servicable for many years to come.