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You’d be surprised. Good quality compact DACs are very expensive unless the manufacturer engineers a better version.
Are they though?
This isn't the 90's. All it needs to do us produce an analog stream.
It depends entirely on the quality of the drivers in the headphones and the listener. Portable USB DACs for audiophiles run upwards of $200.
Yes but they have much, much , much wider margins than cell phone manufacturers. Yes, phone manufacturers will add a $0.1 DAC/AMP chip instead of a $2 because of profit margins in the 100k unit range. The actual DAC IC chips that are very good are not too expensive. The metal housings are literally more expensive. It is not expensive at all to put a good chip in there, it is all the bean counters saying that they have to increase quarterly profits.
Plus "audiophile" DACs are literally 80% snakeoil. Because listening is so subjective, they heavily rely on audiophiles' quest for placebo effect and after-purchase self justification, both of which are a strong phenomenon. Above a FIIo E10k (literally uses a PCM5102, which is very cheap ), you get massive diminishing returns. Then above the ~150 or 200 mark, they all use very similar chips and just play around a bit with distortion on DAC/AMP stacks. Without distortion, there is no discernable difference between them.
I was a signal integrity engineer for years, we can cleanly convert signals in the MHz range (>25x faster than audio signals) and process signals in the >5GHz range. Audio is literally child's play to have near zero noise and 99% perfect analog conversion... Even a product I am working on now where the audio is medically needed to be a certain delay and fidelity to trigger biometric measurement feedback, the DAC chip is extremely cheap compared to "audiophile" gear....
There is a reason why pretty much everyone fails a blind DAC comparison. If there were double-blind tests performed, probably like <1% of the audiophile population (that is already very low) that has extremely abnormal hearing would be able to tell DACs apart consistently above a fairly low threshold.