Two things: wired headphones going through a dongle-to-lightning interface likely have more latency and filtering issues than a direct jack connection would have, not to mention that the phones can no longer provide wired headphone access and charge at the same time. Secondly, even iPhones like the 6S+, the last headphone jack equipped iPhone, had relatively inferior DAC hardware compared to something like the LG V-series phones. Given the current iPhone configuration, you are probably correct that high cost bluetooth headphones are the best alternative available for superior sound coming from the iPhone. If the wired headphones produced by Apple had high quality DAC/Amplifier hardware, say similar to that configured with the AirPods, a similar high quality sound would result.Before the AirPods, everyone was walking around with the white EarPods that came with the iPhones and iPods. iPhones still come with the same wired headphones, that work with the jack the phone has. But everyone is buying EarPods, not because they have no choice, but because they are amazing and people are willing to spend an extra $160 or more for them.
As for high quality earbuds/headphones, Apple is one of several available. CNET has some examples:
https://www.cnet.com/topics/headphones/best-headphones/stereo-bluetooth/