Celtic66,
I agree with you conceptually, however I own an EVS level 2 mod'd Oppo 970 and all I can say is WOW! It is a really incredible player. I'm seriously considering buying a backup unit to use for parts in the even that the original unit fails.
I've owned some very good and pretty expensive players over the years. I've also owned some pretty nice DACs. The EVS mod'd Oppo was the first unit I've ever stuck in one of my systems that actually transformed the system vs just adding an incremental improvement. It made my modestly inexpensive system sound like a completely different beast.
I understand both sides of this argument and could understand the logic of adding a DAC vs modding the unit, but I am very comfortable with recommending the EVS mods if you are interested in that type of setup. One potential benefit of the mod'd unit is that the variable volume control allows you to attach the mod'd Oppo directly to a power amp if you have a single source system. Even though it is in the digital domain, I don't think the volume control works on the coax output.
Enjoy,
TIC