This is a new thing for them as well. Electronic sims have been around and ultimately eliminate used space and make the phones more sealed against water. The iPhone 14 I believe was the first one launched without a sim card slot.
E-sim cards are supported by Apple, Samsung, Google (pixel), Huawei, Oppo, Motorola, Sony, and likely many others. The idea of getting rid of the physical port is what these users are upset about.
Correct - all iPhones in the US only utilize eSIM which is basically a digital sim card that your device can download from the carrier, usually prompted with either a QR Code or the carrier's app can initialize the download after you sign in to their app.
It was previously used for small devices like smart watches, and then I guess Apple decided "this is good enough" and moved iPhones over to use it.