Does this device exist?

Yes and No. There are tons of options that do what you want, but there is not one that is IT. There are trade offs on all the solutions.

You are looking for Qsonix, Sooloos, Olive, or mac mini (check out mach2music).

The biggest problem is ripping the cds. A couple thousand cds at 6min a cd = 200hr if you rip constantly

This is honestly holding me back a little bit on the whole server idea and I don't really want to add another source. If I'm going server I want to go all the way.

The only thing I have seen to help with ripping are the service offered with the high dollar servers (think olive and Sooloos offer it) or buying a robo ripper and then trying to sell it used when I'm done.

Take a look at the ripstation 7601xdp
Rips to various formats and also does look ups for filenames. Windows only but not hard to borrow a PC just to run your rips and then move to another system.

Consider the Music Vault Diamond. It is exactly as you describe, plus automatically backs up on a seperate drive. Uses an iPad as interface, so you are also provided with something that has a use outside of the audio room.

sounds like a mac mini commercial

On your question about cost -- a Mac Mini new is $695.00, but the internal hard drive in that configuration isn't big enough for your collection. So you're probably looking at a two terabyte external hard drive for your collection, and another one for the Time Machine Backup, adding about $400.00 to the cost, for a total of about $1100.00. If you don't already have a monitor, mouse and keyboard you would have to pick those up as well -- how much that costs depends, of course, on what you buy. If you already have them, great. How much you spend on the USB cable to connect to your DAC could, of course, run from very little, if you get it from a place like Best Buy or Amazon, or a great deal, if you simply must have a cable with the AudioQuest or Shunyata name on it.

If you wanted to go the Airport Express route, I assume you already have a wireless network. An Airport Express is $100.00, and the TOSlink cable, like the USB cable, depends on whether you are okay with a generic cable, which won't exceed $30 to $40, depending on length, or you want something exotic, which can run a couple hundred and up. Bear in mind that you need a mini-TOSlink adapter for one end of the cable to use with the Airport Express.

I would not mess with a used Mac Mini, for all sorts of reasons, and forgive me, fellow A'goners, but I also wouldn't mess with a "souped up" Mac Mini from one of the specialty providers -- don't have anything against them, but just personally I have a hard time believing it is worth the money. But that's just my opinion.

Cambridge Audio Azur 640 H. Everything that you have stated is offered. It doesn't need to be connected to the internet - but it can be. Storage amounts can vary (be changed) and expanded. SPDIF digital output. Can be operated with a computer or TV monitor for onscreen or just via the little window built into the device. Used, about $500 I think. I actually have one, though have moved to a computer based server system.