So, what, it'll have a lightning port instead? Can they make the "competing for space" argument?
No, they will add the headphone jack, just about where the mag-safe is. Take a look at the photos of this rumored leaked case: https://forums.macrumors.com/thread...or-oled-touch-panel-four-usb-c-ports.1975194/
The benefits are that:
1) It becomes a charging method using the same cable the iPhone uses, leaving the USB-C port free for peripherals.
2) It serves as a natively compatible headphone jack for the iPhone's Lightning headphones allowing iPhone 7 users to actually use their Lightning headphones on their Macs.
3) It serves an optional USB 3.0 port leaving the USB-C port free for something else to be used at the same time without a hub. This is especially important for the Retina MacBook, which will lose its headphone jack.
4) It allows Apple to simplify its adapter lineup by offering Lightning only adapters for common functions like SDXC card readers, USB 3.0 ports, HDMI ports, etc. It also allows a customer to immediately use any Lightning adapters they already own, where the prospect of buying a lot of USB-C adapters is a deterrent.