It would be stupid to dismiss a lossy codec solely on the ground that it incurs slight variations in volume, if that can be fixed with Replaygain.
Also, I actually apply replaygain while transcoding, so that it works on devices/players that don't support Replaygain, like the iPod Classic's original firmware. Are those files audibly different from their source? Obviously they are, since I've applied large negative gains to them! Does it mean that they're not transparent? Absolutely not, it's just a matter of adjusting the volume.
hmm I am actually trying to imply that the difference in replaygain values resulting from transcoding doesn't come out of nowhere, its there because there are encoder artifacts... it is not the case of simply applying a flat gain across the entire song like your example.
Or in more simple words, as its not the result of lossy encoder applying a flat gain across the entire song, it cannot be undone by simply applying another flat gain.
That is not true, especially at low bit rates the level is often attenuated by a small amount (~0.5 dB). Such difference is already enough for a positive ABX result, even if the files would contain otherwise identical sound. For a fair comparison, the louder file needs to be attenuated on playback to match the levels; with 24-bit output resolution being available on any decent DAC and even onboard HDA codecs, the effect of this on sound quality is negligible compared to that of lossy compression.
Is there any support/proof for this? I've never heard that encoder is supposed to purposely alter the volume automatically...