^^ Actually microphones can be uncanny at how good they are. So too headphones and mic preamps.
IMO the biggest degradation seems to occur in the recording media and in that regard there are no clear winners. So I can see why all that got left out.
How do you know that microphones are that good? By judging with headphones or with speaker systems?
With headphones you cannot judge detail since headphones by their very nature present detail differently than music in front of you. With headphones you also cannot judge if the mic correctly captures the physical impact of the music.
With speaker systems you run into speaker and room distortions and colorations, as well as amplifier behavior. So this will not allow to judge the mic performance properly either, i.e. if it delivers a faithful copy of the live music that it captures.
Fact is that I have never heard any system that properly captures all the timbral detail and color of live music, let alone delivers a faithful copy of its physical impact (just try to reproduce a solo violin and compare with live sound). Regardless how expensive, or if analog or digital (in the larger picture that we are talking about, of live vs. reproduced music, the debate about storage/playback medium becomes almost a side show, especially with today's progress in digital -- it's not 1984 or even 2004 anymore).
So I suspect that the microphone(s) may be a major culprit here, even before the music hits the mic preamp or any storage medium.
It would make sense since, like the speakers and room, the microphone has physical moving parts or physical interaction with the music. Also, by its very physical shape, a mic cannot 'hear' the music like human ears do -- see also for that reason the exploration of binaural recording.
Furthermore, it's not just the mic, it's also how it's used. For example, I have repeatedly heard (and seen in photos) that string quartets are recorded from above. That is a sound perspective that differs from what the listener hears at their seat in the hall. Also orchestras are often recorded with hanging microphones.
All this introduces distortion from the live experience right there.
In this context I also find the following post by Gary on the thread 'Tired of formats, nostalgic for great 44/16 music' interesting:
Yes, I agree. You musicians have the hardest job. You play not knowing what you will eventually sound like on the recording. I've been at a recording console on a pair of headphones, and the recording engineer was switching between two mikes and trying to decide on the mike to use for the take. Both were excellent, but they sounded absolutely different.
As a musician, the sound you hear is so different from the sound we hear. Sitting at a piano, and sitting in the audience listening to the piano (even a couple of feet away) you could be listening to two completely different pianos.