Completely agreed, but they would have missed the holiday quarter. More than likely, the hardware for the iPhone 12s was finalized very early this year, so the mask thing wasn't factored.
The pandemic destroyed a lot of people's disposable income. Asking for $1000 in February is a lot harder than in November when people are spending like crazy for the holidays anyway.
My wife was like "wtf, launching with no Touch ID when we're all going to be wearing masks through 2021? Fail Apple."