For the benefit of others let's quickly sum up the pros/cons of each implementation:
Class A: old but very well understood technology, as such any of the shortcomings of the design have some known way to correct for it. The major disadvantage is that it is highly inefficient (< 50%), so a lot of power is lost as heat. It's not an issue for a desktop application where you have constant power supply and have a big chassis to dissipate the heat, but in the Sony Walkman's team's mind, it is a major drawback as they want to aim for longer play time while not having to slap on a huge (>3000mAH) battery as well as keeping the player sleek, slim, and cool. Also a DAC/Class A topology is more complex, and since the signal path is analogue, is more susceptible to outside EMI especially in a small confined space.
Class D (S-Master): very efficient design in theory (>90%), design is less complex because of everything being packed into one package, thus also less susceptible to outside noise and EMI because it is an all digital path until the last mile (output to headphone). However it is inherently more "noisy" in its D>A conversion, and that its output power is limited. It is excellent for portable application, but is usually insufficient for high power demanding desktop application.
The Walkman team had already made the best device they can with the latest S-Master chip in the WM1Z which is only 2 years old when the DMP-Z1 was released, so internally it is even younger when the DMP-Z1 was in development. As they aren't going to have a new S-Master chip any time soon with increased power output, they cannot overcome the power limitation without doing something drastic with it. So instead of just sit on their ass and wait for new silicon to finish internally, the Walkman team decided to give the classic DAC/Class A topology a go and see what lessons they can learn from it by improving different areas of the signal path that's unrelated to the D to A portion, and apply that know-how to their next flagship Walkman. The flip side is also true - the Walkman team can also see whether the experiences they have with Class D applies to a Class A topology. Afterall, you have to dog food your own products to learn from them. That's what led to the DMP-Z1.
As for the home audio component team - the company has a new S-Master chip, so they also have to learn to use it and make products from it. So as a first test product they made the TA-ZH1ES - the company's FIRST desktop headphone amp. This venture allowed them to find the DA hybrid method in mitigating the shortcomings of using a pure Class D amp in a desktop situation. They also learned from this and has now created the Signature class SA-Z1 active speaker using the S-Master in the DA hybrid topology.
There's no "one ring to rule them all" here - each method has its place and depends on the application. The different team's willingness to test, learn, and release the products into the market allows them to grow and improve. When you think you've perfected something that's when you stop growing, and I'm glad the people at Sony don't have that mind set.