Why is the industry so lame?

I'm a 40+ audiophile who just can't understand why the industry is so tied to the past. Countless audio manufacturers will eventually go the way of the buggy makers if this continues. Consider:

In 1998 the Diamond Rio was introduced and Diamond was sued by the RIAA.
In 2001, the Ipod was introduced and it held 1000 songs.
In January 2003 Flac was introduced.
In 2003, Sonos was founded.
In November 2003 the Squeezebox was introduced.
In April 2004 Apple introduced its own lossless codec.
In 2005, Apple sold over 20MM Ipods for the first time.
In December 2007, Apple sells its 125 Millionth Ipod.

As we head into 2008, this is where the industry finds itself:

A growing number of mfrs now have proprietary Ipod docks to enhance their revenues to the tune of $100-300.

Krell now has a dock dubbed the KID that includes a preamp for about $1300. Matching power amp TBD.

The vast majority of preamplifiers have no DAC or DAC option.

Bryston and Naim have integrated DAC's into one of their integrated amplifiers (Bryston's is an option).

Only Outlaw has a 2 channel receiver with built-in DAC.

Rather than seeing the emerging new technology as something to be embraced the entire industry seems to regard it as something to ridicule. Sure, not everyone wants a DAC in their amp but how many are buying $2500 CD transports these days or even $1000 phono cartridges.

When will the industry wake up and smell the coffee?
I have to agree, in less than 5 years Sonos and Squeezebox type units will be commonplace, and my cd collection will be toast...wow, how much did I spend on that?

In my opinion the Ipod is very good to take it to the gym to provide portable music for a good workout.In fact I am getting one soon for that reason but I wouldn't use it for my main system.I guess I like the in-convinience of spinning cd's and vinyl.
Hack: You missed my point. I'm not talking about just convenience.

Lossless audio has been here for the past 5 years and so have a few products to stream it all over the house. The industry has poo-pooed all digital music as though it was nothing but 128k MP3's. Meanwhile, a few innovative companies (Sonos, Logitech) have run with the ball. The old school is ignoring this new technology at their own peril.

Ckrody: You are exactly right. There are 125MM Ipods out there and every one is hooked up to a PC where music is stored. Any $500 mass-market AVR has built-in DAC's and multiple inputs to accomodate digital streams. It may not have the DAC or implementation you and I want but it's there.

HH Scott, Marantz, Eico and a host of others were swept under the Japanese tide when transistors took over. It will be companies that adapt to the new reality that will prosper and I don't see the old school US mfrs doing it. The UK is doing better, but they also have a ways to go. With our expertise in computer technology and interfaces we should be kicking a$$ here.

GSM18439: I agree that having a digital input on the CD player is a great idea. I'd like it even better on the amplifier because everything runs through it (unless you have powered speakers). Linn and Arcam have nice all in one boxes but don't include a digital input for the DAC. That is sad.

Mrtennis: Whether or not a 40 year old system can outplay today's state of the art is not relevant to my point. Neither is designed for the formats that the industry has already moved towards. That makes for a frustrating scenario for people like me and lost opportunity for companies who built it.
I posit this is not as easy a situation to deal with as has been supposed above. Most American 'high-end' manufacturers are specifically not trying to compete with 'everything-in-the-one-box' products like A-V receivers (which usually have the DAC). There are two issues here: 1) if one competes on price, one risks alienating one's existing customers, many of whom enjoy a psychological effect of owning something 'exclusive', 2) manufacturers who want to compete on quality by offering a much higher price point are effectively cornering themselves into a very small niche market (there is a limited market for all-one-brand stereo+music server systems running tens of thousands of dollars.

While I would love to see ARC, Atmasphere, Berning, CJ, Manley, VAC, VTL, etc (apologies if I left your company out - these just popped into my head) create small integrated amps for less than 2000 dollars a pop which included a 25W amp, a DAC (complete with USB/I2S/SPDIF/BNC/toslink inputs), great attenuation circuit home theater pass-through, and if possible a touch screen remote which allowed me access to my iTunes.

On the other hand, if I already have the integrated amp and PC, I can buy the USB DAC for $300-1000, and can buy the "remote" for the cost of an iPod Touch, and $30 of shareware.

How, pray tell, can the manufacturers above compete with that?
I don't like the idea that trends can be identified, fixed and we can know their outcomes with certainty; to me that is a popular form of arrogance now in style. Gauging people's artistic tastes is also exceedingly difficult and some just don't want MP3, PC-based sources or Ipods at all -the impersonal nature of which gets in the way of enjoyment, not to mention issues of the sound quality like those Hack raised.