Industry growth. Turns out it's a lot easier to "think of the children" when the industry is small and niche than it is when it's making investors billions of dollars a year. Turns out capitalism makes problems harder to solve once the problem itself makes money (see also: tax preparation)
That's also why the moral panic people switched from trying to censor games through government to trying to do it via finance (e.g. Collective Shout lobbying banks, credit cards, and payment processors).
Though if your question is about why the contrast between moral panic over game content and the lack of moral panic over actual victimization — I think that's always been the case, unfortunately. People seem more fearful of their children losing their morals than they are of people with no morals harming their children.
The benefits of having a full-featured computer in my pocket are just too many for me to ditch it permanently if I have a choice. While it's certainly able to distract me if I let it, I don't think I've ever had it disrupt my sleep (aside from late night phone calls).
I think it's better for most (and potentially easier) to keep to the smartphone and just better control the applications that are on it and the notifications that they raise to make sure it isn't overly distracting you. This may require disabling certain pre-installed apps (e.g. Facebook is one I always disable and just interact with via browser when I want to). Another pattern to follow is adding barriers to the things that distract you most so it takes a little more effort to interact with your distractions. Hank Green's Focus Friend app that got popular recently is an example of that -- placing an emotional barrier on getting distracted when you need to focus.
But ultimately, we all need to do what's best for ourselves. Everyone's suceptibility to distraction is different and if a dumbphone is what works best for you, then by all means, go with that for as long as it's useful.