You do if you want to route across a broader area which is a different use case to what we are talking about. Two phones right next to each other are routes through the BTS even though they could easily route directly to one another and that is for non functional reasons.
No, they could literally not send on the frequencies they listen on in case of FDD. Enabling this would require extra radio hardware. Also there would need to be a some kind of encryption key exchange between devices which is not needed in the centralized setup. They could not easily route to one another without adding extra stuff.
