Seems like it could be a good idea, TRex.
As anona says, it is possible to play a missing letter and then drag it into its correct place, but I dare say this might be fiddly on some small screens. On the other hand, if a phone screen is displaying everything from the X with the letters across to the button at the end of the space where you build the words, everything will be quite small. Playing on a phone sized screen would be quite a challenge in general I would have thought, but I know some people do it.
Changing a cancel button to a backspace button would probably catch a few people out for a while, but it wouldn't be as annoying as if the change were the other way around.