I didn't realise that asking a question, then in the absence of an answer, attempting to develop a working hypothesis was personalising the issue! I'm just interested in what you think is a good thing, or a bad thing, or a useful thing.
Why would you ask that?
It's a question of preference. Why does my preference mean anything? Hint: It shouldn't.
OK, let's call it 'soft clipping', or 'saturation' or 'approaching overload'. I think you know what I mean!
Actually, calling slowly growing distortions one step at a time is certainly not soft clipping, it's kind of like tape saturation but without the misbehavior at higher frequencies, and it's a case where "overload" is not a well-defined idea. At what point do you decide you're overloading? Usually you can ALSO find a clipping point above the point where "useful" (to those who like it) levels of distortion happen.
We may be getting there one step at a time. If it's not too personal could I ask these questions:
Some systems saturate/overload/soft clip (could be tape, vinyl, amplifiers) causing added distortion.
(a) Do you think that this effect can be a useful substitute for extra dynamic range?
Some people like the effect. So, yes, for those people, it is useful.
(b) Do you think that these systems may have been designed, or may have evolved, in the way they have, because of this characteristic?
There was no deliberate design I know of, but there are examples of recordings that do appear to use this kind of thing, at low levels, in what seems to be a generally accepted fashion. My suspicion, and that is all I have to offer, is that people listened and decided at what level the music sounded best, and cut it at that level. That subsumes a lot more than just high-level performance.
(c) Could you envisage advocating, and designing, a system where this effect was deliberately induced as a way of expanding the apparent dynamic range of a compressed recording?
It's not very hard to do so.
(d) Is the 'saturation' inherent in some recording systems like vinyl, in fact, a good thing under some circumstances, if not all?
Don't think the word "saturation" is appropriate. If you like it, it's a good thing. If you don't, it's not. Don't confuse preference with anything else.
(e) Would you rather have a system that was 'saturation'-free up to any volume you wanted, or one that had the characteristics of existing vinyl/tube equipment?
Why would my preference matter? My preference for a system would be so far off a two-channel system of any sort that comparisons are not even appropriate.
(f) In the ideal world, would you like the option of the 'saturation'-free system, plus the ability to add dynamic range expansion using DSP?
I'm sure some people might.
(g) In (f) would you prefer to do the dynamic range expansion with added distortion (simulated 'saturation') or 'straight' dynamic range expansion?
I am genuinely interested, because I don't just want to make observations. Thanks!
Again, what I would prefer is outside of this discussion. Bear in mind that I've done a fair amount of work on things like direct/diffuse radiation, multichannel audio, and the like, as well as a bunch of research into spatial sensation, etc.