Users certainly do still need to care about having encryption at the physical layer. Wi-Fi networks having done key exchange and taking that out of the equation

Users certainly do still need to care about having encryption at the physical layer. Wi-Fi networks having done key exchange and taking that out of the equation for regular users so that they get some guarantees of encryption without constantly doing key exchange on their own is a big deal. You are correct that transport layer security like HTTPS can protect many connections end to end, however if you have MITM attacks on your physical layer they can do certificate pinning attacks, redirection attacks and more. Sure, there is a good chance they won't get into your Gmail because Google embeds the certificates of their and the top other websites into their browser, but that's not much consolation.