Disagree on major points. Camera stores in most of the smaller markets were shutting down long before smartphones. Smartphones have created photographic awareness to some degree, which increases the market for dedicated cameras that offer a better combination of features than smartphones, to interested buyers: Zoom, big sensor, flexibility, size, pocketability, optical viewfinders, etc.
The sensor on the best phone is pitiful AFAIK, and while the processing engines are excellent, there's only so much you can do in the tradeoff between reach, sensor size, and overall size. Thinness is the word for smartphones, which is a killer for photographers. Maybe someday we will have a foldout camera phone with some kind of high-tech bellows to increase the reach and/or allow a larger sensor.
Those people who are not inclined to advance beyond the fixed-lens smartphone never were candidates for more than a $100 camera.