For some people, the ability to use wired headphones/earphones while charging has a lot of value. Additionally, some invest in quality earphones or IEM's and replacing those with the lower-quality limited selection of USB-C earphones is not desirable. Likewise with Bluetooth.
The 3.5mm audio connection is nowhere near dead yet.
FWIW for IEMs with detachable cables, which pretty much all of the good ones do, you can get replacement USB-C cables now. That has the advantage of decoupling the sound quality from the highly variable quality of the phones internal DAC since the DAC is instead part of the cable, and some of those cables even have configurable hardware DSP features. It doesn't solve the charging problem though.
The 3.5mm audio connection is nowhere near dead yet.