I hear you on all your points, but there is already a significant market of people who use USB OTG from their smartphone to a DAC who I'm sure would love to free themselves of another pesky usb cable.
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In short, I think there is potential demand and no tech barriers, but then again the device I'm describing may already exist, which is why I put forth the question.
Yes, and that includes me.
However "significant" does not always translate to "significant enough to make manufacturing sense." You don't even have to get to WiFi input on DACs for that - look at how many desktop units aren't even tested by manufacturers (let alone designed from the ground up) to work with USB OTG. You'd think the "significant number of people using USB OTG" would have motivated that, but no, it hasn't, which is also why we're not yet at the "helping people free themselves of another pesky usb cable" part.
And we already have wifi DACs like the Chromecast audio, so the technology is already available for a rather simple wireless audio bridge that could cost even less than the Chromecast.
Don't mistake the mass market to just translate to the Hi-Fi market like that. Apple had the Airport, so they had the tech to stream from HDDs, but people still went for iPod docks that convert them into digital transports, even for people on pure 2ch (ie no surround, no TVs) that have to get up to switch albums/playlists since they can't see the screen. That was still a step forward from the 256kbps max res that the Airport can handle, assuming the iPods were fllled with ALAC.
Similar problem with the Chromecast. Even if it can handle 16/44.1, hifi manufacturers are looking at 24/96 as the future (ie digital albums nowadays are shifting to digital download sales as either 320kbps 16/44.1 or 24/96 FLAC) along with DSD, plus there's an ongoing trend of vinyl resurgence, so chances are they're still trying to figure out how to get that much bandwidth to run FLAC beyond 16/44.1 apart from music servers that basically just trade a CD transport for a LAN cable and a NAS (or just an HDD on USB), which, given the file size, is naturally what developed first. If you want to look at demand, that's where they projected it would be, given file size, ie, a bank of HDDs in another room would have a huge advantage in storage over microSDs in smartphones (which not all phones have to begin with) without the mechanical and cooling noise penalty.
By contrast it's easy enough to get the Chromecast out there given the use people will have for them - running Spotify on a living room HT system they got cheap in some big store. You'd have to wait for manufacturers to see that Tidal is as much of a thing as people downloading albums (which again are now being sold at 24/96) or ripping their own CDs to put WiFi input on DACs. There are music servers that run as DACs of course but again, the way they're structured, the phone is the interface, and they directly access Spotify (just like MiniPCs or HT receivers) and the phone is relegated to an interface device for those who don't have this kind of device in an HT system (for the screen).
You can always either just use a Raspberry Pi with an external HDD, or just replace your DAC with a BT receiver so you can still use the phone as a wireless server.
