Something to understand with electronics is there's no such thing as waisted space. A look at any circuit board will show you that. I can also say from slight experience in a college drafting class that laying out electronic parts is extremely hard due to space limitations.
That said, sometimes compromises have to be made for the overall functionality of the device. It's been reported that that space is where the radios are located. When you consider the phone is aluminum, that makes sense so it has a way to pass the signal outside the body. Whatever the case, I can assure you there's a reason for that design, even if you don't like it.
Besides, it's not like the buttons are taking up half the screen. I don't see the reason for the uproar I've been seeing for losing what amounts to a couple lines of text when reading something. In that context, it just sounds silly. On a personal level, I think having everything moved down to that space would interfere with one handed use. It's already a bit of a stretch with my thumb to reach the buttons where they are now.
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