What Apple said was that on-device models would be from the iPhone Air/17 Pro models and newer. That doesn't mean that the iPhone 15 Pro to 16 wouldn't get Apple Intelligence via Private Cloud Compute, though that probably means they won't have on-device models. I don't remember the marketing for those phones promising on-device models, just Apple Intelligence capabilities in general.
And there was a lawsuit and those users will be compensated.
This new update for 17pro is no longer misleading
“Apple has agreed to pay some iPhone buyers a collective $250m (£184m) to end a lawsuit accusing the company of misleading people about new artificial intelligence (AI) features and capabilities.”
I have an iPhone 16 and I don't feel like I'm getting the shaft. It sounds like there's one specific customization thing that'll only work on the pro models? Not an issue. At some point in a few years I'll buy a new phone and it'll be the latest again, and then it won't be.
I'll probably get downvoted, but my guess is that they realized they need a cutting-edge local model that would only work decently on the most powerful iPhones. And I see why Apple would choose to give no AI at all rather than use a weaker model that will hinder user experience.
Now [relevant parts of] Siri AI is restricted to iPhone 17 / iPhone Air and more recent models.
People who believed Apple and bought an iPhone 16 to use with Apple Intelligence are getting the shaft.