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A DAC is definitely the better option in my opinion, especially if your phone doesnt have great audio quality.
When the controllers first came out, they'd cheap out by making the computer process the audio. My first Bherringer controller would convert the mic input to digital and send it to the computer to mix on the sound card. If the computer was disconnected you couldnt use the mic or hook up a cd player.
Some people are just cheap and manufactures will make whatever people will buy. The phone already has audio, so the controller is just that: a bunch of buttons. You dont have speakers built into a keyboard or mouse. A controller is just an HID.