Let's be specific -- it keeps the current tech that matters for a smooth user experience, namely the SOC and RAM. The oldest tech on the phone, like the display and TouchID, is the least important to a good user experience and its all perfectly acceptable performance by even current standards, and doesn't have to be the best. In addition they offer the latest features for the things customers notice most -- in this case the camera. The front facing camera while important to some, is not essential for most, but at the same time they added the front flash, which improves the photos taken with the front in low light mitigating some of that over the same camera on older phones. All things considered, it does more of what a customer expects a modern phone to do as well as the top of the line phones, for a lot less, with compromises that don't tend to be the focus of the customer.