It's not a flagship, but I'm really liking my Sony Xperia 10V. It's lightweight, narrow, has amazing battery life (I'm at 80% after a full day of light use, 1h37m SoT), has lots of RAM, microSD, and 3.5mm. Its processor is weak, apparently, but I haven't noticed; I don't do heavy gaming on mobile and it's snappy enough for web browsing and has enough RAM to keep lots of apps running.
So, there are good compact phone options. Hopefully other people keep buying them to keep them profitable for companies to support!
Ultimately they're going to be chasing the dollar. No matter how much some of us love small phones, they just don't sell that well. Better for Asus to survive and change the recipe than die on that (small) hill.
On the other hand, if there's an Ultra, maybe there's also a [Regular] Zenfone coming