I think the reason why most people still stick with lossy is a lack of options. Most DAP manufacturers make the assumption that the masses are thick. "Mp3 should be adequate for them" they perhaps say. And that is one main reason why I think it's a shame for any one who claims to be "technical" be using the same player that "Auntie Nelly" got for her birthday.
The usual unconfigurable inflexible proprietry format, non standard crappy players!
As a matter of principle I now only play flac. Occassionaly some old mp3 albums I have ripped back to flac will show up. Trust me I can tell the difference immedeatly. It may be very difficult to describe exactly what the differences are which I think will always be an issue but after listening to the lossless album for such a long time the quality is immedeatly obvious. On other occasions I can also tell the difference between my ogg albums and the flac counterparts. It seems the discrepancy arises when people are put on the spot and asked to make a judgement.
With 60 gigs I do have enough albums for my train journeys in flac but I guess most people have less and they have to stick with lossy.
Once again it's the lack of options. for example how many players play flac using the original manufacturers firmware. Only 2 i know of. iaudio and Zen. How appalling is that?
If you had a terabyte of space on your DAP which you used for music only, what will be your argument to play lossy formats? Not much.
We should seek out and lobby manufacturers who are not fearful of creating players for the hobbyist.
Take an example the issue of IEMs and the ability of the listener to pick out ambient noise by choice. I solved this quite easily. Assigning a button on rockbox to take me to the recording screen. When I need to talk to a colleague or about to go to work, with my phones on I jump to the recording screen and I can talk normally and hear everything around me. In fact sometimes clearer because of the microphone. Once again good design with more options. I dont need to spend all that money on Shure E500PTH or at least they cant make me pay for "push to hear" technology if I think their headphone is crap.
How many players come with a builtin microphone ..... or should we say how many listeners buy players with a microphone? very few..
I rest my case.
