Their absence encourages you to check your phone more often, which means you'll unlock it and look at some content more often, which means as revenue for someone.
Being honest I think the opposite of this is more likely true. Seeing a flashing indicator for all the notifications my phone “thinks” are important is going to make me more likely to constantly check my phone. Barring that I check when I want to. And with the new passive display modes I can glance and decide whether to even unlock or not.
This is the real answer for OP. Those lights were replaced. Maybe OP (and maybe me as well, I haven't really thought about it) would prefer to still have the notification LED, but to the hardware manufacturers they replaced those with something "cooler".
Genuinely wouldn't be surprised if this was the truth. The tactics these companies employ are both putridly-covert, yet brilliantly executed - especially so if it also saves a few cents.