I'd love to know how many people complaining about the home button are actually hardware engineers or have real knowledge of all the ways to implement Touch ID. We're really supposed to believe there are all these better ways of implementing it but Apple is choosing not to do so because their engineers are either lazy or don't know how to innovate? Let's not forget Samsung's finger print sensor is also implemented via physical home button.
No, it's just a choice.
You could place the touch ID on the back, for unlocking, and have a narrow home button where the current one if if you wanted to.
There is no reason, it's just a choice.