even the last generation of full resolution "flagship" grade audio ladder DACs were advertised for at least 8x oversampling
so upsampling with digital filtering, correction were here already
but yes multi-bit delta sigma seem to have won the market
but there are a few hold outs claiming delta-sigma noise shaping loop dynamics, "noise floor modulation" is evidence of some mysterious musical soul destroying "time domain error" that engineers are overlooking
It's probably easier, hence cheaper than a precision controlled ladder DAC. Could be a simple case of economics overruling the performance benefits.
Adding any kind of noise (autocorrelated to source signal or not) is by definition a "time domain error". Modulating the noise is an intruguing notion that probably ultimately depends ultimately on the ranges of SNR achieved. If it's "lowenough" then it's "good enough"