We would love to be able to get rid of that banner space and give it back to the keyboard. The challenge we have is with the key preview and the longpress popups: these must fit within the boundaries of the keyboard on iPhones, per the iOS specification. The iOS system keyboard gets a special deal here which we can’t replicate – its popups and key previews can go outside the bounds of the keyboard.
In our testing, when the key previews were not shown or were obscured by the user’s finger (because there was no space above the key), the keyboard became significantly more difficult to use. Similarly, we tried weird sideways longpress popups, but they were not very usable. So the banner has become an uncomfortable compromise. Maybe one day iOS will allow us to escape the bounds of the keyboard area and do nicer things.
Of course, when you add predictive text to the keyboard, then the banner space suddenly becomes much more useful!
We are contemplating ways to allow the user to adjust the size of the keyboard, which is itself a compromise between keyboard space and app space but may go someway to helping alleviate your concern?