USB-C represents the dream of a single, small, reversible connector that works with every device, and it’s being adopted by the entire tech industry. USB-C isn’t as small as Lightning but it’s small enough. More importantly, it’d allow users to use one connector for everything; USB-A, while universal on desktop computers, never achieved ubiquity because it wasn’t suited for mobile devices. USB-C is.
Conversely, Lightning is under Apple’s control and Apple likes the idea of controlling their stack as much as possible (for many different reasons). A transition to USB-C would be costly for users in the short term, and it would be extremely perplexing the year after the iPhone 7 fully embraced Lightning.
Furthermore, unlike the transition from 30-pin to Lightning in 2012, Apple now has a richer, more lucrative ecosystem of accessories and devices based on Lightning, from AirPods and Apple Pencil to keyboards, mice, EarPods, game controllers, Siri remotes, and more. Moving away from Lightning means transitioning several product lines to a standard that Apple doesn’t own. It means additional inconsistency across the board.
Good summary from Federico Viticci about the arguments for and against moving to USB-C in the next iPhone. The arguments for moving are obvious, but the arguments against it are a bit more interesting.
There’s definitely more of an argument to be made for moving to USB-C than there was for ditching the headphone jack. It would also mean that the lifespan of the Lightning connector has been very short. There are plenty of people still using an iPhone 4/4S or iPad 2s - and those people will have completely missed the switch to Lightning.