To an extent yes, but that's not necessarily the case depending on the phone and the reader, and at least some of that I'd put down to marketing.
Some of the apps are really good at giving you background/page colour and texture options, plus the quality of phone screens has improved immensely and you can of course adjust brightness to whatever you want. I think many have a separate device partially out of habit but also because they already use their phones for so much they might not want another battery drain. It may be a bit of a niche use case, but given the apps are free and almost everyone has a smart phone and/or tablet anyway, it's worth giving them a shot before making an investment to see how you get on. The battery life thing can be solved quite easily by getting a slim battery pack for your phone, it'll still be a smaller footprint than an e-reader + phone and I think some decent sized battery banks even support fast charge if you don't want to deal with having the thing physically strapped to your device.
Example:
This is how I have Cool Reader set up, so personal preference on my end rather than anything enforced. I can choose the background colour and texture, the font size and type, and a whole bunch of other things to get it looking however I want. It also has a better PPI than a Kindle would offer me, and as mentioned earlier brightness adjustment is simple too and I often have it quite low while reading in bed.
Being able to easily read while holding the device with one hand is important to me also, which was the case with older Kindles that had physical side buttons, the newer iterations I do not like at all.
