This exact same argument can be made against physical buttons as well. Goes both ways.
In my experience talking with my friends, screens have broken and become either completely unusable or partially unusable so many more times than physical buttons not working. If physical buttons were all bad and always going to fail after a few months, why does every phone have at least 3 physical buttons (power, volume up, volume down)? I think physical buttons are much more reliable than you are making them out to be.
I agree. The physical home button failing isn't really the primary reason I don't like it, but it is something to worry about because it's used constantly.
I guess I'm also much more careful with my phone. I've yet to ever drop any phones I've owned.
Like what advantages specifically? Taking up screen real estate and being prone to system lags are not advantages in my mind.
I've had the Nexus 4 for some time now. I have not experienced any lag whatsoever when using the Back, Home, App Switcher buttons. I've had missed presses (did you read my "Nexus 4 Complaints" thread?) which I think is due to smaller touch points. But I've never had them lag when it's clear I pressed it (the graying effect). Likewise, I'm a huge Power Toggle user, and the app hasn't crashed on me once. I'm not sure what's going on with your device.
As for screen real estate, some hate this, but I am not bothered by it. In fact, I'm glad it does. It makes reaching for parts of the phone easier. In the same "Nexus 4 Complaints" thread I created, I wrote about how the screen is just a hair too large and out of reach for single hand use when reaching across or upward on the screen. If the Home keys weren't there, it'd be even harder.
When using the S3, I find that the lower buttons are too far down, and it's a bit of a strain to reach down to get to the home buttons, etc. Of course, with an iPhone 5, which is smaller and thinner, this isn't a problem. But on the Nexus, if the buttons were below where they are now, it'd be harder to reach.
Plus, I think you know the other advantages. Adaptable icons (when using the keyboard in messaging apps, the Back button becomes an arrow down to indicate it'll hide the keyboard), no need to depress anything (as in, having to exert a resistive force so the button gets pressed. It's leisurely to tap on screen buttons, espeically when lying and holding it upside down or when lying on your side, etc.), able to make it dynamic (like the slide up to get to Google Now), it can "disappear" when viewing pics/videos (but still remain usable), and because it's software, you can add buttons to it (I've seen people add a dedicated Menu button), you can change what the buttons do, and you can even hide if it if you really insist on not having it (requires root, I think).
In short, it's more flexible. Something about it feels more future-proof, futuristic.
If these aren't advantage to you, that's fair.
Let me clarify this statement:
Android as a whole doesn't have Siri or any fully hands free functionality equivalent.
If physical buttons were all bad and always going to fail after a few months, why does every phone have at least 3 physical buttons (power, volume up, volume down)?
You have me there. But depressing a physical home button isn't exactly "fully hands free" either. I want to be clear, I'm not arguing that physical buttons have
no advantages. I'm simply making my case for the preference of onscreen ones.
Volume up and power/sleep buttons just aren't depressed as much as the home button. You said one of the advantages of the physical home button on the iphone is to wake it that way. That would mean you only press the power/sleep button to put it to sleep if you woke your device with the home button every time. Obviously no one can count exact numbers but the home button would be used many more times than volume or power/sleep button, I would think.
What's interesting is that for just about every story I hear of someone's home button breaking, I hear at least 3 stories about people with cracked screens.
It's fair to say drops are more frequent (are they? I don't know, but I can believe if they are). But do the cracked screens always become fully unusable? I've seen people with cracked screens still able to use their phone. It's not pretty, but it's still functional. Not every crack screen destroys the touch screen.
Either way, a cracked screen or a failed physical button both suck.