When I have seen people listing their systems lately

Any deviation from Redbook means a new format. New players, new software (discs). It’s a vicious circle - in order for a new format to succeed, people have to buy both enough of the discs And enough of the players. If not enough people are buying the discs, they will forget about making the players and/or if not enough players are being sold, they will forgo making the discs.

From what I can see SACD is dead, as is bluray audio and possibly DSD....I dunno what could be next...until the music industry finally breaks down and embraces downloads, presumably that’s coming eventually, but when...who knows.

I believe that most people who want a CD or SACD player has one by now. Digital, however, is just getting started and so it has a higher growth trajectory. It reminds me that it's the same with CDs. They say that CD sales are falling off but how could they not fall off when they have been around for more than three decades. Again, anyone who wants a specific CD probably already has it. Also, there are "used record/CD stores" whose sales are not recorded as new sales, although they are for the buyers who frequent them. 

In summary, the music business is trying to find new ways to separate the consumer from their money. They know that the CD market, including the players and the CDs themselves are almost exhausted. So, now there's digital downloads, music servers, etc.. I have decided that cassettes, CDs, and records are as far as I want to go to chase music. So, when a stereo store owner says that CD is dead, he simply means that he hopes that his customers will abandon their CD players and begin buying the next big thing- digital. Sorry if that sounds cynical but unfortunately, it's true!

I think what the storeowner was saying was that computer audio and music servers are taking over for the standalone CD/SACD player--I know that one of my dealers in NJ only used a computer for digital demonstrations.  However, there are dinosaurs like me who still like to put CDs and SACDs into drawers, and handle vinyl (and at least in my case are too intimidated or lazy to learn how to use our computers and downloads).  Also, those of us with large collections of vinyl and silver discs might not have the time or the inclination to store them in a computer.  Just my $.02. 

tonykay, spot on !
Marketing in USA is a very large business whose primary task to to create a need where none exists .

I have friends in the UK and it's a different story there. Everybody still buys CD's and back catalogue's are plentiful. Looking at Amazon.UK is a wonderland full of Rock and Classical CD's.