They're definitely nice. It doesn't help that most internal DACs for phones are pretty terrible.

A good DAC in a phone is pretty comparable though. The Sony Xperia DAC is pretty good, especially compared to bluetooths limitations. Though most portable DACs are probably as good or better, with the benefit of using it for more devices or extra volume control.

I think it's one of those converging aspects that leads to where we are today. Phone DACs weren't great, headphones jacks were pushed as bulky for not the best sound quality, then phone DACs aren't pushed to be as good and phones start using them less. Why bother spending extra on an internal DAC if it's just going to be seen as less good as the alternative anyway. Before we knew it portable DACs are an audiophile product and Bluetooth is the norm.

It doesn't help that amidst all this there was the ohm wars for headphones lol