Here is a good example of that. I've never encountered anyone who could distinguish a 320 kbps MP3 from a WAV in a bias controlled test. The files are radically different but the sound is the same. The compression simply doesn't matter because the data that is removed is not audible.
That is exactly the reason why my media server in my listening room is packed with AAC 256 VBR files and all of the original CDs are in boxes in the garage.
I believe the possiblity of difference is based on the recording. If the recording is modern pop, it's probably recorded poorly, and doesn't matter if it's FLAC or not as it sounds very poor with a transparent setup. Test is more useful with a file with lots of information and highly detailed or quality recording. Down converting that to hear any difference would be more telling than taking Mily Cirus's new album and comparing the bit rates.
It actually has nothing at all to do with the sound quality of the recording itself. When I was testing lossy vs lossless, I started with very well recorded classical and jazz pieces and AAC worked like gangbusters all the way down to 192. But when I started to test older recordings from the pre-hifi era, the bitrate requirements jumped up a bit.
I eventually ran across a particular CD that was a codec buster... the most difficult thing to encode without artifacting possible. In order to be completely transparent, I had to use LAME 320 or AAC 256. It artifacted at any bitrate below that. Was that troublesome CD a pristine digital recording of the Berlin Philharmonic? Nope. It was Sammy Davis Jr: The Decca Years. Something about the massed strings in these records makes medium bitrates gurgle like crazy.
http://www.amazon.com/The-Decca-Years-Sammy-Davis/dp/B000002OF2/
Yep. I tested dozens of titles across most genres, and the modern electronic / pop albums were often the ones with no noticeable differences...although a few pop albums were among the ones with gaping chasms, so to speak. The deeper, punchier bass of the lossless version was especially startling.
That sounds like you didn't level match. Human ears are pretty sensitive to volume differences in bass, but codecs are able to compress bass the easiest without artifacting. Level matching is super important because most codecs change the overall volume when they encode. You also need to learn to detect what artifacting sounds like. Compression error isn't a subtle thing at all. If you are hearing "veils" and "punchier bass" and "less high frequencies" at decent bitrates, it is probably a problem with level matching or expectation bias.
And you have just demonstrated the blindspot by defending science with that statement. Because audio equipment contributes to an aesthetic experience, useful research would typically need to be comprised of both quantitative and qualitative, where the qualitative would take that into account.
I seriously doubt that mixing in subjective aesthetics would help anyone at all. If you handed me a Sunday newspaper from 1950, my subjective aesthetics would go off the chart. I would dive on the comics section like a pig in mud. But to you, it would probably be something mildly interesting that you thumb through and toss in the trash. Everyone's subjective tastes are different. You can measure and quantify them, but ultimately, all you end up with is the results of a popularity contest. Everyone knows that here at Head-Fi, people praise the equipment they happen to own and denigrate the equipment they don't have. You could do a poll as to the equipment people "like", but the results would just show you the equipment that people happen to *own* themselves.
Subjectivity is great for you. It doesn't necessarily apply to me. Objectivity works the same for both of us.
You have to define what you are going after as a hifi nut... are you going after accurate sound reproduction, or are you aiming at subjective aesthetic pleasure? If you are going for accuracy, then look for equipment with better specs. If you are going for aesthetic pleasure, just buy any halfway decent equipment and put your focus on buying lots of CDs of music you like. Myself, I start with the accurate equipment, and once I've achieved that, I move on to the music.