It's already a reality: https://www.unihertz.com/collections/jelly-series

My only issue is that it's not Snapdragon and not quite dev/root friendly, but otherwise it ticks all the boxes - including a 3.5mm jack and an IR Blaster!

The qin3 ultra match a lot of his demands for under 220$ but it's lacking quite hard on some others( mainly camera ). What he's asking for is a premium small sized phone but since it's a niche product with limited sales, making a premium quality varient would make it a niche within a niche, so I highly doubt we'll see it one day.

From the guy behind pebble? Neat

There have been some small phones that run Android over the years. These days it’s less common I suspect because the devices are used for so much more these days. Having more of our lives involving the mobile smart device makes a larger screen just more sensible.

But over the years there have been some. I have a few in my collection. I think Nokia has had some. Also a couple of Sony Ericsson Xperia models I think. Some others too.

But current tech I just don’t think manufacturers want to bother because I don’t think the potential customer base is good enough to be able to make it worth making.