Why do headphones sound so good...

compared to speakers? Someone posed this question on a guitar forum I participate in. I didn't really know how to answer the question.

I basically stated that good 'phones can be had for a hundred bucks but good speakers cost a few grand. Not including the cost of good electronics (a few thousand more). So, for pretty short money, an iPod and a set of Grado's, for example, you can get pretty damn good sound reproduction vs. a full blown Hifi set up. I believe that a good room filling stereo blows away any set of 'phones. But without cost as a factor.

Thoughts?