Lenovo Legion Go S official: $499 buys the first authorized third-party SteamOS handheld

Space most likely. They are trying to have a larger screen without increasing the overall size.

I think the touchpads are a good idea, but realistically speaking most games that are fun to play on a handheld don't need them.

The lack of touchpads renders the desktop mode almost useless unless you add external peripherals.

These devices are big like a tablet and heavier than a tablet. To type on a tablet, you need to put it down on a table. Same here.

The Steam Deck touchpads allow you to type while you hold it.