Sure, cost was almost certainly taken into account, they are a business after all.
But they didn’t just get lucky by gambling touch screens and waiting to become cheap enough. Take a look at the user interface of the touchscreen phones that came before the iPhone. Very limited in what they could do. Users were locked to a few small menus and custom-tailored applets, not much different than the UI of the phones before the iPhone. A touch screen was really more of a tech gimmick than a feature. Most (if not all) only accepted single stationary taps, any movement with a finger pressed to the screen wouldn’t register properly, if at all, and there’s really only so much you can do with that.
What Apple innovated is a better use for touch screens, an improvement in the way we were able to interact with our phones, coupled with a re-imagining of what a phone’s interface should be at a fundamental level. And they accomplished this with huge help from their decision to move away from tap-only touch to something that felt more natural: multiple/moving gestures, such as scrolling by moving your finger up or down, pinch to zoom, etc.
This really caused the single biggest movement away from what cell phones really were for us. Before, they were mostly portable telephones with a few extra poorly-implemented and barely functional gimmicks (ever use a web browser on a Razr?). With the iPhone’s success, Apple single-handedly shifted us into the new cell phone model; a customisable, intuitive to use, modular canvas that anyone can mould into whatever suits their needs via apps created by anyone (which Apple gets huge credit for yet again, because this could only he possible with the developer kits Apple released, effectively outsourcing creative solutions in taking advantage of the iPhone’s functionality).
When you look at what they set out to innovate, how they went about doing it, how much different it was than phones in the past, and how incredibly similar it is to phones today, a whole 15 years later, you just cannot reasonably deny that it was an extremely innovative and influential product.