If size is not a requirement, I understand that they didn't optimize for it.
I don't know if they could have, but for something that just sits somewhere in your living room... that's a totally different design mindset than something that needs to fit in your pocket and whose main real estate you want to spend on a screen.
Meanwhile everyone forgets Project Tango which has a similar sized sensor and structured light projector...
The Apple "innovation" here is finding an application for it: basically Snapchat. (Because, and let's be really serious here, FaceID is not a good application.)
...and that alone just shows how off the mark this implementation is. When this comes to the cheap Chinese Android phones in six months, it's going to cause another sales boom there, as parents will actually be willing to spend a few hundred dollars for a phone upgrade for a teenager, verses the thousand bucks for one of these Apple phones...