I don't think it's reasonable to make every consumer buy a DSLR and use photoshop. I understand my results will not be as good as a DSLR, but within those limitations I expect the absolute BEST from Apple. I'm not sure what pics you were looking at, but in the iPhone/pixel2 comparisons the pixel 2 pics looked a LOT better. You could see all the pores on the face in the pixel 2 for example, where on the iPhone you could clearly see the smoothing they did and it looked like something an amateur would do trying to smooth a picture on photoshop. Now I'm not saying the iPhones pictures are terrible or anything, I'm sure they are still top of the line. But they certainly aren't the best by any stretch of the imagination. It's not only Google that has surpassed them either, other oem's like Huawei have made significant strides.
I also think you downplay the importance of a camera on a smartphone, well I suppose this depends on the user and is pretty unique to every consumer. For myself I have 2 young kids and I want something that's always in my pocket, ready to take a picture at any second of the day with the caveat that the picture won't be quite as nice as a dedicated camera. I'll bet if you had a survey the camera would be very close to the top as a reason why consumers buy a smartphone, probably only beat by necessities such as calls/texting and maybe social media.