It's cheaper for the manufacturer. It shifts the UI work from expensive hardware design and manufacturing, that needs to be in-sync with the rest of design and manufacturing of the car, into purely software realm that can be outsourced to some cheap noname company. All the hardware complexity goes away, you only have a glass slab to fit somewhere.
Though arguably, the starker difference is with home appliances, where touch interfaces replaced buttons. There, there's no dynamic display (at best, only a light behind a button turning on or off) - so you don't have touch screens, you have a much simpler touch recognition technology, that has zero moving parts and can be pretty much etched onto the board, which is a significant saving over mechanical buttons. And it looks cool, which helped with marketing initially.
that's correct, however, as consumers, my opinion is that we (that is, we that share my point of view, obviously!) should try to buy what we prefer regardless of what's cheaper for the manufacturer. If possible of course, we should spend more for something that in the end we think it's better and not fall for flashy designs that makes it look like you're driving some kind of futuristic car.
About home appliances, specifically kitchens, in my country (Italy) there has been a widespread wave of electric kitchens with touch interface, which are awful if you do intense cooking: it all becomes covered in water and other substances making it harder to cook. Maybe cooking quality and ease is not that relevant, considered the other benefits of having a touch screen, i don't know: but the design itself, in my opinion, expressed as beauty that better vehicles functionality, is "broken", that is, breaks this definition.
Though arguably, the starker difference is with home appliances, where touch interfaces replaced buttons. There, there's no dynamic display (at best, only a light behind a button turning on or off) - so you don't have touch screens, you have a much simpler touch recognition technology, that has zero moving parts and can be pretty much etched onto the board, which is a significant saving over mechanical buttons. And it looks cool, which helped with marketing initially.