The main problem is the digital to analog conversion has to happen in the phone. DACs involve trade offs and they aren't all equivalent. With the 3.5mm jack you

The main problem is the digital to analog conversion has to happen in the phone. DACs involve trade offs and they aren't all equivalent. With the 3.5mm jack you get whatever your phone has. The early conversion to analog has other implications. Distortions in the signal can more easily affect what you hear than digital, which can do error correction. Also, you might want your headphones to do signal processing. That probably needs to be done digitally, so if your signal is analog you'll have to digitize, process, then convert back to analog. And the 3.5mm jack doesn't deliver the power. So if you want to do any processing or amplification you'll need a battery that you have to charge or some other power supply. 3.5mm also allows for only very basic controls.