That headline is the claim of an automotive group in this Fox News DC story. The American Automobile Association says pedestrian injuries and deaths are increasing because people wearing earphones are not aware of their surroundings. I’d personally be interested in knowing the real crash data on this.
I don’t wear earphones while cycling, but I also realize the hearing impaired can cycle safely as well. In California, riding with both ears covered with earbuds and headphones (with some exceptions) is a violation (CVC 27400), but it is legal to ride with one ear covered.
How about you?