I doubt the internal display sucks up that much profit compared to the rest of the materials, processors, cameras, sensors, and other electronics in the device.

An iPhone display is roughly $80 BOM. That said, an iPhone display includes touch sensors that aren't needed, nor would it need to be Retina quality.

Battery life is more problematic, but if you're at a desk or sitting down (or even on a plane) there's a charging port handy to help with that. Surprised, actually, they didn't put MagSafe charging on the batter so you could just set it on a charger.