Its not out of reach for me and the keyboard is also fine for me... Perhaps get a smaller phone for smaller hands?
It's probably a mistake on Google's part but you know how it goes with boardroom decisions.
You only need look to a good universal remote for evidence why physical buttons are useful.
Isn't the new flagship Logitech Harmony a touchscreen, because of the freedom and customisability it offers?
Google have changed the menu buttons at least once, not having hardware buttons allows unlimited customization too.
Maybe having programmable hardware buttons would keep people happy?