"Who's going to drop their phone in water (but not too deep, and only clear fresh water not salt water, chlorinated pool water, etc.) and leave it there for minutes?"
Generally they won't leave it there for too many minutes if they can help it, but lots of people are perfectly capable of dropping their phone in the sink, a puddle, or something similar. IPx7 is the lowest standard to cover actual immersion for any length of time, so obviously that's what's needed to cover things like that. I'm sure it's great if you've never dropped anything or never go near any body of water larger than an eggcup, but those are both things average humans have to contend with in their day-to-day lives.
"And don't get me started on IP68, which "improves" IP67 by being exactly the same except 1.5 meters of water."
No it isn't. IPx8 covers immersion to any depth greater than 1m; it's up to the manufacturer to decide what depth that is. Things like cameras and watches are frequently rated to tens of metres. It's essentially an open-ended standard that is essentially just anything better than IPx7 but with no upper limit.
"WTF let's add IP69 and go for 2 meters!"
IPx9 covers high-pressure jets, not continuous immersion. Immersion to 2m is already covered by IPx8.