There are two aspects to this problem. The first has been solved. 256-bit AAC is indistinguishable from uncompressed audio. One might argue that improvements could be made in the base rates: going 20-bit, 96Khz. Even that, is almost not enough to qualify as a "marginal" improvement. None but the best ears can tell any difference at all.

The second is a rather vexing problem: The crappy quality of DA convertors. While Apple has done a service by switching entirely to high-quality AAC in iTunes, their iPods have been a mixed bag. They skimp on the DA circuitry. The Macbook Pros are even worse. Horribly noisy audio output.

Some of the concerns seem more sensible than others. Lossless audio I'd put fairly far down the list: in blind tests, nobody, not even audiophiles, can tell the difference between high-quality mp3s (e.g. lame -v0) and FLAC.