It's to make the iPhone slimmer. Not that it needs to be any slimmer.
It's about control. The new standard has DRM, so you can't record or copy sound coming from them. It's also a proprietary format, to keep you from using anything Apple disapproves of. They don't like that anyone can make headphones, earbuds, iPhone cases, external speakers or anything that they don't get some cash out of. So instead, this.
There's no reason for digital wires, or wireless. The standard audio jack is universal, it's great, everyone can use it, it has high fidelity. If you want wireless, there's bluetooth and it's awful.
Now, it's possible that they'll put this in all the new Apple gear (I will be P*SSED if I can't get a headphone jack in my computer-- might have to go Hackintosh!) and give you the ability to switch between sources on the fly, that could be cool. And I guess it fits with Apple getting rid of extraneous elements (floppy drive, ethernet ports, etc) to keep things streamlined, but when you do that, you want to keep the most UNIVERSAL ports. USB, headphones, the lock, etc. And when you have double-use ports (like one port for USB AND charging and that's it) on a device where most people use both? That's overkill.
The thing is, the Apple minimalist design is reaching the point of diminishing returns. You can't really make an iPhone or a lapto much thinner before it becomes too frail or just generally unusable, I don't think. So what are they supposed to do? The next laptops will have an OLED screen replacing the function bar, which I guess is cool (though it does look a bit iffy), but that's about it.
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