Earlier quoted context omitted.
I didn't say it was a problem but one of the theories for why they would make this change is audio quality. I believe it would allow you to build pre-amps and things into headphones.
Yes, you would need at least a D/A converter and a preamp in the headphone. But why would you want to do this? Good headphone DACs/amps are relatively big and heavy and they run on batteries (yet another thing to charge). The Fiio E5 is a small headphone amp (no DAC), and it's still the size of an iPod Shuffle.
I think that's the point of lightning - they can derive power through the port. As for size I think there's already a few products out there that manage it. I saw one reviewed a few weeks ago.