The lower keyboard position is absolutely for usability reasons. Puzzazz has its own custom keyboard, so we had to decide what to do when we were updating the app for iPhone X. We concluded that Apple was right to raise it up because it is too hard to type when the keyboard is right at the bottom.
We did do one thing differently. When somebody is using our TouchWrite handwriting recognition and only the cursor keys and/or puzzle function buttons are shown, we lower them to provide more screen real estate to the puzzle. This works well because those cursor keys and buttons are used very differently than a text keyboard. And, of course, when no keyboard, cursor keys, or function buttons are shown at all, the puzzle takes the whole screen.