I don't think it's phone cameras getting too good: nowadays every picture comes with so many "computational photography" enhancements applied that they no longer look and feel like photos.

Noise, blur, soft edges, muted colours, limited dynamic range, unbalanced whites, all of these things are unavoidable, real phenomena of optical systems that we daily experience with our eyes, and removing them makes the images look like dreams or AI hallucinations instead of like instants of reality.