Is 128kbps too low-quality a file size for the iPhone 5?
Qualification: I'm a professional sound engineer.  

Opinion: By the time you're listening on the move, in the car etc, it's not going to make any difference.

Fact: You can keep your high bit-rate files on the computer &amp; re-encode them on the fly when you sync your iTunes playlists to the phone.
Best of both worlds.

Connect your phone to iTunes, click its icon at the top [not in the sidebar] 


Select Summary from the sidebar on the left &amp; scroll the main area to the bottom > Options
Select 'Convert higher bit rate songs to... 128kbps AAC'



The first sync after this will be slower, as it does the conversions. After that, you'll not notice the difference.