Yes, I know about the virtual trackpad, and it's still a pain in the butt to use. Before touch-and-hold, there was the faster deep press, which was better albeit not great, and the current setup is a regression.
Add a keyboard is an answer. On-screen keyboard will always be more limited, but I can accept that, as long as it’s good enough for situations where i can’t use an external keyboard. In situations where I know I will have to do a lot of text entry, it’s easy enough to add a keyboard, or use dictation. I use the same Bluetooth mechanical keyboard, Nuphy air 75, on both my MacBook Pro and my iPad, so keyboard experience is same for both, and both come with a suboptimal keyboard out of the box, including the MacBook Pro.
"Add a keyboard" isn't an answer to the point raised, which is that the virtual keyboard on iOS is highly-sub-optimal, and Apple isn't working hard enough to improve it.
For an on screen keyboard I find it far from highly-sub-optimal, I think it’s pretty decent.
More importantly, it’s not realistic to think it will ever be as good as a real keyboard for lot of text entry. I expect dictation to do a better job for data entry.
In fact, this comment was created using dictation on an iPad, almost flawless, not much editing needed afterwards, and you can always use a keyboards if you prefer.
I have a niche complaint that makes physical keyboards a non-starter for me: there is no way to add keyboard layouts to iOS/iPadOS. If you’re used to a layout that isn’t in the subset Apple supports you cannot use a physical keyboard.
I have my own keyboard layout that I use since at least 2011, with drivers for macOS, windows, and Linux. I have no way to make it available on my iPad.
I definitely think you should be able to add keyboard layouts at a software level on iPadOS and iOS, but one possible solution to the problem right now is using a programmable keyboard using QMK [1], ZMK [2], or some other open-source firmware. There's even a usb-usb converter [3] that will convert keystrokes from any keyboard into ones that you map using TMK or QMK, so you can use your own.
On iOS/iPadOS, touch-hold the virtual space bar and it becomes a trackpad for fine positioning of the cursor.
Magic Keyboard is a laptop-quality input device where capslock can be remapped to Esc for vim editing in ssh.