I see absolutely zero sense in on-screen buttons, unless they are configurable. Since this is WP, they probably won't be, so why waste pixels on the screen for buttons when you can leave them on the bezel? On 925 the bottom bezel is only slightly taller than the top one, and it doesn't bug me at all. I also hate it how on my Nexus 7, virtual (on-screen) buttons go into landscape when I move the tablet, wasting precious pixels (there's only 800 of those and a lot of screen is wasted for buttons and notification bar).
Hardware camera button is the best thing that happened to camera phones. I had one on Arc S, but it was positioned so awkwardly that I never used it, I almost dropped the phone if I tried to press it, on Lumias, it's perfect. I don't care much if it stays or not on cheaper models, but a PureView without a camera button is a waste of technology. I take all my photos with the hardware button on my 925.