That seems to completely defeat the point of it being end to end encrypted in the first place.

True, but these days you can disable iCloud backups without giving up all that much. (it also re-keys Messages in iCloud when you turn off backups)

Keychain, messages, and health data are all E2E encrypted and synced to iCloud.

By not doing iCloud backups, you're basically only giving up backups of app icon placement, home/lock screen background images, app data that isn't otherwise synced via iCloud or the app's dedicated sync service, and a handful of phone settings.

You can opt for the occasional iTunes backup to preserve those infrequently changing elements on the phone, and not have to compromise on recovery point for more important data like messages and security creds since all of that is synced in real time.

How much longer will iTunes be around?

The backup function is moving to Finder before iTunes disappears entirely.

That's the whole joke. Apple pushes E2E in advertising but fails to mention how by default it's all """backed up""" in their cloud where they hold the keys. It's ridiculous.