I'm sure that they could have put in all those specs and still have small bezels. LG have seemingly managed to do it with the G3. Also, I don't really see the point in having the speakers were they are. It may give a better sound but who uses their phone in this way? If I want to listen to music on my phone, I put earphones in as I would imagine most people do.
If you look at comparison pictures, the bottom bezel on the G2 is actually slightly bigger than the black bar on the M8, and the leaks of the G3 so far don't make it out to be any smaller. If you took out all the space the speakers occupy, the M8 would actually be the smallest flagship since the Moto X, and then it would be down to a 4.7" vs 5" screen difference. Almost half of the speaker's area is literally unusable, because that's where they actually are. The rest of the top bar is occupied with the notification light, sensors, and camera. The bottom has the microphone, micro USB port, and headphone jack. They need that black bar, because there really is no room for anything else. It's not that LG can shrink their bezel down to nothing, it's that they specifically design their screens to need as little bezel and be as thin as possible in the first place. As far as I know, HTC's been using tweaked versions of the same display technology from the DNA. That's not a bad thing since it's pretty much always been one of the best screens, and gets better with each iteration, but they're still dealing with the technical constraints of how much room the display still needs.
It's not so much just music, but that there is really no usage advantage for a consumer whatsoever to having speakers on the rear. If they put stereo speakers on the rear, then they'd have to have a third on the front for calls anyway. If you have the phone sitting on a desk face up, then the sound of everything that's not a call using the earpiece is distorted. If you have it face down, then you have to flip the phone over to actually see or use anything. No one watches a movie on their phone with the speakers facing them instead of the screen. Rear speakers just aren't practical. Bottom speakers like the G2, Nexus 5, iPhone and such, are better, but not by much. Understanding how sound waves work, unless you are actually pointing the bottom of the phone at yourself, you'll never be getting the sound directly; you'd always be getting a reflection of the wavefronts. Stereo speakers purely on the bottom are too close together to really make a difference, and if you had a speaker on the bottom and one on top then you'd be sending sound waves in completely opposite directions. I'm rather interested in how weird a device that did that might sound. Front facing speakers have the least amount of tampering due to the environment in most cases. I don't watch movies on my mobile devices. You might not either. But since Netflix has over 50 million installs, I'm pretty sure there are a large number of people who do, and any speaker set-up that isn't front facing is sub-optimal. HTC choose the speakers to be in that position, because it's the most practical. And they aren't the only ones, Sony's starting to use front facing too.
Personally, I prefer to listen to music with headphones, because I have a really nice pair, and it's more personal you could say, but I wear headphones like at least six hours a day, so there are times when I'd rather use speakers, because I'm rather fatigued. It is those times that I always use my M8 over my Nexus 7 to listen to music. I'd rather use my phone to listen to music then have to leave my tablet face down and flip it over anytime I want to change the song. As an added bonus, since the Dot View case doesn't let the phone lay flat when the flap is flipped to the back (ugh), it actually acts like a kickstand ((yay!) still not as good as a dedicated kickstand)), so I can actually leave it on a table and have the sound still somewhat directed towards me. But that's just me though.
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