People are a bit stupid. Also, shooting in portrait mode can be done one handed while landscape generally uses two.
But why are they set up like that in the first place?
The phone is sensible enough to know it's being held portrait and takes a portrait image the right way up, rather than a landscape one sideways
[1]. This would be fine if the users were savvy enough to realise that most of the time landscape is a much better way to frame the subject, and only used portrait sparingly (as per a traditional camera).
Stupid people are completely oblivious to subtleties such as framing and aspect ratios. They're the ones who watched 4:3 analog TV stretched to fill a 16:9 TV and didn't see anything wrong with it, even when watching
Stargate: SG1[2], and they're the ones who take photos by pointing their camera at the middle of the subject and pressing the button.
The real rot set in when younger and older people started to use smartphones as their primary internet access device, leading to an outbreak of non-aspect-blind people who see portrait images as reasonable or possibly even desirable. They forget that people might want to view video on a proper computer or television.
Obviously there's no reason a smartphone camera can't be configured to take landscape photos when held in portrait format (which will probably involve some cropping), but it's a setting that would immediately get turned off by people who "don't want the black bars" in their camera app.
I think we're going to be stuck with this until circular images become the Next Big Thing...
[1] It's amusing to watch a naive smartphone user confronted with an image that's encoded the wrong way up. They'll instinctively rotate their device, only for it to flip the image back to the wrong way round a second later. How many times they do this before locking the display aspect ratio or tilting their head probably serves as a form of intelligence test.
[2] A series notable not only for the repeated appearance of a large, circular wormhole device but also Don S. Davis's head. If you can't spot there's something funny going on with the aspect ratio there, there's something wrong with you.