My read of the Khronos API quick reference cards is that there is tremendous flexibility in how the API's can be implemented. The API will handle the data stream from the source files (a variety of file types, though FLAC was not mentioned specifically) and then produces a PCI output. It then becomes only a matter of how the connection to any external device is made. If Android is to be implemented in any device, it appears that it needs to be 4.0+ or ICS. Based on these snippets, I'm not even sure that a separate DAC will be required; though an amp will likely prove helpful. Some hope for the back chain of existing devices is another article suggesting that Android 3.2+ may be eligible for upgrades to 4.0.
Just read about a Toshiba Thrive tablet that can accept a 128Gb SDXC memory card and offers a USB port , a mini USB port, and a full sized HDMI port. As a flexible source with lots of storage and convenient file management, Android platforms should be pretty good. Bet we'll see some great new audio products along these lines by the summer and I hope they follow the Toshiba model. It seems a bit unique at the moment.
Watch for news. Here's a link from Phandroid about the new NDK and the two new API's which are Khronos OpenMAX AL 1.0.1 and
So, I think you're right. 2nd generation and new product should certainly implement this innovation.