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One must wonder why they chose to expend significant R&D to make a complicated, power-sucking adapter for use on a mobile device that provides sub-par output and costs quite a bit more than a "dumb" cable.And people have answered this convincingly. From comments on TFA:
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The reason behind this stupid expensive solution: It seems that the lightning connector is similar to the thunderbolt connector idea.
With USB you have Power/USB/MHL output. Each method requires a specific combination of pins. Updating to a different protocol, support for other devices requires difficult pin sharing (thus hardware modification), support for currently unknown future connections is impossible. If in the future something new appears it won’t work with older USB devices.
With lightning you can connect anything. Similar to thunderbolt it does not use a specific protocol to handle a specific task. It uses a general method to communicate between adapter and iOS device. That way Apple can send anything through this lightning adapter. The adapter itself gets updated automatically because it loads its firmware from the used device. So Apple can send USB2.0, USB3.0, Analog audio, Digital Audio, HDMI and any new standard through it, in theory.
The idea is great: The lightning adapter will be Apples only port and it will remain future proof.
In reality however, the lightning connector also has a limited bandwidth thus they have to compress their data, the conversion to and from the Apple lightning protocol requires lots of processing power, on both sides, and reduces quality. And finally it’s expensive.
Apple should have tried to use thunderbolt instead of their own propietary technology, but then they would have used a common technology which other manufacturers could use and benefit from, too, that’s not the way Apple likes it, so they introduced their own thing, which is crap right now.
AND:
Just remember, this is v1 hardware for a tough future proofing problem. I genuinely appreciate the lengths Apple went through to create A) a reversible plug, so you can stop mashing and flipping. B) handled all the connector options.
The built in decoder module could take a compatible 1080p video stream and push that to the TV at full resolution, the screen mirroring is a separate protocol. Now I’m curious if the Lightning-SVGA adapter has the same rig!
So, v1 of the Lightning connector is probably (assuming) going at USB2 speeds. In v2 of the connector we could see USB3 (5Gbit/s) or thunderbolt (10Gbit/s) speeds, but all the accessories still work.
Assuming the faster speeds come, it’ll support 4K TV output video streams, same plug. Yay future.