Just got a new Bluesound Node. Very disappointed!

So as long as the data file is “true” shouldn’t the SQ be determined by my outboard DAC?

Yes…Maybe not 100% but  very close for all practical purposes. As long as everything is configured and operating properly. At least that is my experience to date after 15 years of streaming.

I auditioned the Bluesound Node together with the Lindemann Limetree Bridge, I found the BSN did improve with better outboard DAC's but only marginally, with the Lindemann the better the DAC the better it sounded.

A lot of audiophiles buy and then sell these Node products because they don’t like the sound quality even after upgrading the DAC. Just a fact. Don’t shoot the messenger. 

The way the OP describes the problem makes it sound like a defective unit to me.  And transports do matter.  The DAC is the bigger determinant of the pairing, but the the situation is analogous to a disc transport DAC combination.  You wouldn’t pair a top notch DAC with a $20 DVD player as a disc transport, and a poor player streaming into a good DAC will sound similarly compromised .  I’ve used the Node 2 and streamers that cost 10 times as much.  The more expensive players sound better but the Node has a decent “floor” if not as high a ceiling

Maybe your previous stuff was rolled off and the Node is just showing you what is really there?  But that’s academic. If you don’t like it, give it back. Simple.