Do you mind explaining this one a bit more? I don't think the analog analogy is the best one to use here since we are talking digital and ones and zeros. The reason a high end cdp cost so much mostly the dac, you can only do so much with the rest of the internals to improve sound-wise.
Using a great UI with proper connections with an upgraded DAC doesn't seem anywhere near as bad as you are suggesting but if it is I would like to know why.
It's a pretty easy to understand analogy isn't it? How about trying to build something on a less than great foundation? Does that make more sense to you?
I'm not saying the Bluesound is bad, far from it. For its price it's a wonderful product and delivers very good sound quality. Nor did I say that adding a good DAC to it is "bad". It's not. There's just a better way to about getting better sound from streaming, which is what you're after if you're going to add a DAC to a device that already has one, right?
Go read the other "streaming newbie" thread that spun off this one. You'll see that a lot of people have done that and see little to no improvement in sound quality.
Upgrading to a better streamer/DAC (the TEAC NT-505) resulted in a much greater improvement in sound quality, not to mention soundstage, than adding a $3500 DAC to the Bluesound.
I don't know the exact "why" of it, since as you said, "it's just ones and zeros", but I know what I heard. Spending less than $2K plus recovering a few hundred from the sale of my Node 2 was also a better deal from a cost/performance standpoint than buying a Bluesound and an external DAC.