There are always research studies that offer different opinions, and other studies have shown that neonatal phthalate exposure has had little effect on children, and the phthalate industry asserts that the level of phthalate exposure utilized in experiments with rodents was so much higher than the level of phthalate exposure incurred by actual people that the results were skewed.
But the main reason sex toy manufacturers likely use phthalates is that it is inexpensive, and the way they’ve always done it. Unfortunately the industry is rarely proactive about the health of their customers and instead responds only when there is strong pressure to do so.
The industry magazine Adult Novelty Business produced an excellent profile about phthalates in sex toys, which included quotes from several manufacturers who have said they will move to eliminate phthalates from their products.