Yes. It is always better to design and power something separately rather than modding. I know this because I modded all types of transports and computer audio devices for 10 years, including Sonos. This is better.
You need the better S/PDIF cable anyway, so there is no savings there.
Shelf space is 4.5"X4.5". Pretty small.
There is also the benefit of upsampling 44.1 to 96. The DAC will sound better because the digital filter is better.
There is also the benefit of galvanic isolation.
Steve N.Empirical Audio