USB Type-C is very possible; however, the USB Type-C connector is larger than the lightning connector.
Lightning has eight pins.
USB Type-C has 24 pins.
Thunderbolt 3 has 20 pins.
The USB Type-C connector would be able to carry full Thunderbolt 3 and Lightning pins which would be interesting if future iPhone SoCs support Thunderbolt.
USB Type-C with USB 3.2 is the next thing we will see on phones.
Lightning is capable of carrying USB 3.0 but not 3.1 or 3.2.
Next-gen Lightning will have to be able to carry USB 3.2 which requires many more pins.
I would prefer to see Thunderbolt 3/4 on the next iPhone but I think Thunderbolt 4 should have a new connector which is like the USB Type-C but is more like the strength of the Lightning connector. The connector could be called USB Type-D.