I first noticed this effect with the original Hugo; before Hugo, as I improved my designs, then things became more transparent - and a recordings' flaws were easier to hear - to the point where a lot of recordings were unlistenable. But all that changed with Hugo; I could play bad quality recordings, and still enjoy the music. And this progress has been maintained with Blu Dave for example. Actually with the addition of an M scaler, this is the aspect you will appreciate the most. Now clearly from a measurement POV, and from the POV of how accurately the original waveform is being reconstructed, a Blu Dave is very much more accurate than say a Mojo. And you can play a 1930's mono recording, and enjoy the music- even though you can hear huge levels of distortion and noise, and the EQ is all wrong.
So why is this the case? I puzzled about this for a long time,and my conclusions are that digital introduces profound distortions that the ear brain has not been programmed to deal with. So the brain is used to coping with noise; it's used to dealing with simple harmonic distortion (the ear is very non-linear as a transducer); it's used to dealing with different frequency responses (when you go into a bright room or a dull room your brain auto compensates). But it can't deal with the unnatural distortions that digital introduces; and my path has been to identify and reduce these problems in a very aggressive way, without making assumptions on the way.
So I think conventional digital just destroys the music, and that's why things have profoundly changed for the better; when you listen to a Blu Dave, then you are there, in touch with the original master recording.
A pro recording engineer put it to me rather well - your gear allows me to easily hear what is wrong with a recording; but I can also experience what is right about the music.
And getting the music right is all that really matters...
I have been reflecting on this quite a bit. As I've gone from Mojo to DAVE to BluDAVE (and now Hugo2), my expectations for what makes something "musical" has changed quite a bit.
The analogy I use is that when I am walking by a coffee shop, I can tell if there is live music is being played inside, even with all the distortions of the music coming through the walls and glass, etc. Another example, is when I was walking into the airport a couple months ago, my ears perked up because I was hearing live piano. When I went in, I saw that another traveler was sitting at a piano and playing. Even with all the traffic and airport noise, I could tell it was live music from outside the terminal, and I was attracted to it and wanted to listen.
As I've gone up the Chord stack, that same feeling/impact of something being "real" has become ever more present. Even civilians in another room will pop their head around the corner and say things like "that sounds really good" or "that sounds like there is someone live in the room". For my buddy John, when he setup his Hugo2 and Omega speakers, the neighbors the next day asked if he had had some musician friends over, and commented how nice things sounded.
That has nothing to do with our normal measures of tonal balance and noise floor or sound stage or imaging clarity or being in the sweet spot. I can guarantee it sounds like crap from a different room (by any normal audiophile measures), but it still sounds real, and even non-audiophiles perk up and notice real. To Rob's point, our brains know how to deal with the natural distortion of real noises that are going through walls and barriers and overcome background noises, and to focus on the "real".
With DAVE and BluDAVE, I get that sense of real, even in bad recordings. With great vintage recordings, it is a frickin' time machine, and I see John Coltrane standing in front of me.