I'm not trying to suggest that designing for different display sizes is simple. You are conflating two problems. Firstly there is the problem that devices have

I'm not trying to suggest that designing for different display sizes is simple. You are conflating two problems. Firstly there is the problem that devices have a wide variety of screen sizes and usage scenarios. Your phone has a different number of pixels per arc-second than your laptop. Then there is the problem that your computer is actively lying to you about what physical units are and what the screens DPI actually is. This makes working around the first problem harder. The first problem requires a judgement call by the developer, and even some input from the user in many situations since e.g. some users just prefer bigger text. (Although most games dont seem to care about this so arcseconds/pixel at the "intended" viewing distance is probably a reasonable way to scale the text.) The second problem is so horribly endemic that I doubt it will be fixed in any meaningful way for a long time.