There is a greater failure rate the larger you make apanel. a great many are discarded from production lines. If the screen is smaller then it is less likely to incur error.
Also that cost is hidden in a phone, i'm not sure what the value of screen components would be.
A large defective panel can be cut down into smaller panels most of which will have no defects. You can sell most of your faulty large panels as small panels, but there is no extra source of large panels.
Also that cost is hidden in a phone, i'm not sure what the value of screen components would be.