Crack open an iPhone sometime. The mainboard is a tiny little thing with only a couple of chips on it. In general- CPU, storage, RAM, baseband (cellular radio). Sure they could add a USB 3.2 controller, but that’s another chip sucking power and taking board space, increasing BoM cost, and since most iPhone users never plug their phone into a computer it’d be wasted.

So they use the USB controller built into the SoC (system on chip), and with the old chip that’s 2.0 only.
Guess they must have a surplus of A16 chips and/or the A17 is proving expensive to make.