I think these points are all valid and appreciate everyone's response. But what I would like to reiterate is that although recordings and equipment technology ultimately limits how closely playback of recordings resembles the real thing, I think the audiophile industry is aiming for the wrong end of the spectrum. In this I mean that they are catering to our desire for exciting but inaccurate sound rather than realistic sound, and this can be proven by what can be heard at shows, dealers, and others' sound systems. The gold standard has veered away from what is truth toward that which initially sounds impressive but ultimately is unsatisfying, particularly when trying to reconcile with natural sound. Is it because we hear so little natural sound in favor of that which is artifically enhanced through amplification, audiophile systems, etc? Hence my premise that we have become conditioned to such a sound and therby demand it.
Personally, i have found that shows (like television show rooms) seem set up for 'high impact'...not subtle cues. Its like they turn the 'brightness up' on a television screen to grab your attention...but the good thing is that same system dialed-in properly at home can be quite good.
I believe that the efforts to push the boundaries of noise floor, detail, decay, transient speed, dynamic range (all measureable...and more easily marketable because they can be measured and look good on the brochure)...have been GOOD for the industry...but without balancing these technical merits with less measurable elements (tonality, 'sweetness' of midrange, 'density of the note' when a key is struck on a Steinway, ability to handle and sort out complex passages...) you can end up listening to a somewhat 'mechanical' system. However, take those technical capabilities (which far surpass many of their older counterparts from 10-20 years ago)...and combine them with the 'softer elements' mentioned above...and THAT is MAGIC.
I do think the industry has found with the greater budgets consumers allow them...they have started playing with very expensive technologies and parts in an effort to create a scientifically all-out component...i think the most recent generation of equipment has been far more successful in incorporating those technologies into their designs while balancing those subtler elements (tonality, etc).
I take for example the ACT 2...far quieter, more detail, more decay than prior CJ models...but big fans of older CJ equipment found it 'strict'...and while i love the ACT2...i did agree to a certain level. But the new GAT has maintained truly the best of CJ's tonality, purity, naturalness...with the technological strengths (noise floor, extension, detail, dynamic range) of the ACT 2 that they say was one of the first to use these newer technologies.