This does not scale at all. For hobbyist with no kids, sure, spend your time turning old phone for some fancy doorbell, etc. But for normals? Who would maintain such equipment, who would be in charge of testing if the battery will not get overheated once the new device stays for longer time in place X? Who would maintain and support such devices. I don't want to service myself my media player.
Sure but if old phones could be used like a really powerful raspberry pi (and they are really much more powerful, at least the high end) then the resale value would go up and more people would sell theirs to nerds rather than throwing it away. Still a net positive IMO