It sure is!
I should’ve split my post in two: The first paragraph was to address the assumption that most people have £1000 in savings. I just don’t think that’s true (sadly!)
The second part is addressing the need for an overdraft: To be able to serve direct debits when the balance is low (a credit card won’t help you there).
That’s true. But also the sensible thing: They need to make money, before they can give it away (in form of savings interest), and if they want to stay alive, than the amount of money they make needs to be higher than what they give away in the long term.
To put it another way: If you want savings interest you can easily open a 2nd account elsewhere. If you need to serve direct debits even if your balance is low, that’s not quite that easy.
Edit: Or, to put it yet another way: For many people it’s difficult to use a current account as the “main account”, if it has no overdraft facility. Hence the priority.