It happens, there were some threads about it. I bought a defective Glo where touchscreen no longer works, and haven't found a way to repair it...
It can be hardware issue (failed IR emitter, sensor, or scratches in the optic parts of the case/bezel, or misalignment of any of these parts).
It can also be dirt somewhere, use a soft cloth and LCD cleaner fluid all around so there won't be obstructions for the IR beam and hope for the best...
https://www.mobileread.com/forums/sho...80#post3120480
It could also be software but then it should be fixed after a factory reset ...
As for rarity, I think broken displays are more common than losing touch functionality. My H2O sometimes has a bit of dust all around and touch still works fine despite it.