Concerning display and other fancy features. It is true they are not essential for soldering. But noobs like me like them. So, it's just a matter of target market. Also would make possible to change profiles, preset temperatures, etc easier (ersa with configuration on sdcard is a joke).
I personally like rotating encoders with push button. Minimalistic and convenient.
A company that does not have experience with encoders should not be using them for this. Months or years later, when the encoder wears in and the device becomes buggy or even unusable is too big a liability for this. Additionally, a rotary encoder just keeps spinning. A pot, you don't have to look at, which the pot is much preferable to me for a soldering iron control. (Absolute encoders are a thing; a very expensive thing). And finally, no matter how fast is your fancy micro, if you turn a given encoder too fast, it is going to miss steps.
Another problem is the issue of when the encoder actually fails. The parameters of an electric encoder are very specific, and they must be accounted for in the software. If the part can no longer be sourced 10+ years down the line, your station could turn into a paperweight, for practical purposes. Replacing with a different encoder even with the same number of detents could prove problematic due to different bounce characteristics and whatnot. Barring hours of tweaking and debugging and hacking. It may be possible to account for this in the software, in the first place, at least if your micro has speed and resources to dedicate to this. But considering how many devices I own where the designer can't even get the originally specc'ed encoder to work, properly, this is not realistic to just assume as a given. Having tinkered with encoders, myself (with less than 100% reliability, admittedly), I suspect to account for wider range of replacement parts, it might require significant compromise, such as in regards to max rpm that can be detected (at least without user interface to change parameters, which not only takes "work" for the user, but is going to be difficult to do when the only user input is not working).
Save encoder for navigating menu that is more complicated than temp up or down. It might look cool when Marco Reps does it. But anyone who were to rely on that station will eventually curse the design choice.
This is not a TS-100; nor is the TS-100 the future of soldering irons.