I think the main reason that phones don't have broadcast AM and FM enabled (even though the hardware is present in the chips), is because the digital chips in the phone (micro-processor etc) would generate so much interference (at these relatively low frequencies) that it would be unworkable. To sufficiently shield the main PCB would require a huge effort, which means weight, size and cost.

To get an idea, you only need to hold your AM/FM radio near your PC or Laptop.