Yeah - capacitive touch tech was far from new, but it was still super expensive compared to resistive. Price made it largely not an option until around the time that Apple adopted it (which they were definitely ahead of the curve on, and they made fantastic use of it). It was pretty clear at the time that nobody was all that fond of styluses, but they were the sole pragmatic option available then.
That, and many people were glad to have plastic screens - iPhones shattering because you looked at them too enthusiastically was a source of many lols and many expensive repairs / re-purchases. The early iPhones still scratched nearly as easily (keys or sand were more than sufficient), but they were nowhere near as durable overall. Decent screen durability, screen protectors, and protective cases took years to arrive - the gorilla glass of the time was far, far more fragile than it is now.
That, and many people were glad to have plastic screens - iPhones shattering because you looked at them too enthusiastically was a source of many lols and many expensive repairs / re-purchases. The early iPhones still scratched nearly as easily (keys or sand were more than sufficient), but they were nowhere near as durable overall. Decent screen durability, screen protectors, and protective cases took years to arrive - the gorilla glass of the time was far, far more fragile than it is now.