Phones (really, the pocket/handheld form factor) are a necessity and are limited; I agree. We could deliver better text input interfaces for them.
For heavy typers, physical keyboards in candybar phones (.e.g, old Blackberrys, etc.) and landscape-oriented clamshells fix many issues, but those are outre for some reason. Even on-screen UIs could be better. Just arrow keys to move to the cursor precisely would be a signficant improvement.
I think the blackberry I had before the current trend of full touchscreen smartphones was the only cellphone I ever enjoyed using for the device itself.
The first Android phone had a physical keyboard and a little trackball. The rest of the phone was a bit anemic even by the standards of the time but those two features were glorious.