That's because those kinds of people are audio purists who hate anythingg that makes headphones not sound like headphones. I take their opinions with a grain of bittering agent powder. As in I don't really care for that opinion whatsoever. These are people who heard VSS once, and thought "It sounds way too different from what I'm used to, so it sucks."
A good virtual surround solution gives the most natural sense of ACTUAL positional cues, that stereo can NEVER ever match. Stereo does not have any frontal/rear positional accuracy. All you get is a line between your head that sounds different if something is either in front of behind you. Virtual surround actually PLACES sounds in front or behind you, where you don't have to take a second to wonder if the sound is is 'front' sound, or 'rear' sound. Again, look at the first page for some examples.
It's like NOT listening to headphones anymore, but speakers placed all around you. This is what these purists don't get. They expect a headphone sound to sound like a headphone. It doesn't.
The Creative X7 is a solid dac/amp in its own right. Even without the virtual surround, it's a fantastic dac/amp, so I dunno what the complaint is there. I'd take it over any typical dac+amp in the price range any day of the week.