WOW...I don't know what to say here. This is 100% opposite of my impression. IMO the E9 is actually quite bad for driving any small portable headphones. I think there's been lots of reviews that confirm this (The NWAVguy(?) website is one of them I believe). So bad that I just refuse to use most with them. Some Audio Technica stuff sounds good at least. What's especially bad is the people who say the E9 can't drive a 600 ohm headphone. That's nonsense. Not saying you should buy the E9 for one or that it gets my approval.
I'm not a huge fan of the E9 and rarely use it. It's very good for the price. What do you expect for $100 or so? For the K702/K701 it was a massive upgrade over my Asgard (for the K702 ONLY!!). No kidding. But yes, the Asgard (version I had) was a very poor match for the K702. Supposedly it's been improved. No, the Asgard isn't better than the E9, but the E9 was a better match for AKG stuff.
Biggest part I don't agree with is that I think it makes almost all of my headphones have an artificially huge soundstage. It actually makes my Q701 have less fuller mids and I don't like it as much. If this means, the E9 is less colored then so be it..BTW how the heck can an amp make a headphone's soundstage seem much larger? Isn't that considered coloring the sound a bit? I don't want to change amps and make it larger than it's supposed to be.
BTW both jacks offer a slightly different sound to me. The 1/8" jack has the larger soundstage and the sound is much brighter. The smaller jack adds a bit of warmth and the soundstage seems smaller. Sounds a tad less clear. Maybe this is the jack which gave you the impression of a squashed sound with a smaller soundstage?
Seriously, you're not comparing your $500+ amps to the E9 right?
Not a fan of the E7 as a dac at all and I hated it with the E9.
If there's an amp for $100 that's easily purchased in the USA and sounds great with the K702, please let us know.