My experience is that 2 channel is better than home theater and here is why (I hope I can explain this in a way people understand).
When I have used a Surround sound processor I never used a center channel, because if you have the right speakers set up correctly they should project a huge sound stage and image so well that the sound fills the room and you have a sense of some depth, however when I used a center channel, soundtracks are usually mixed so most of the info comes from the center, and even if I used two speakers there is no stereo center only mono. So bottom line is that the sound stage always lacks when I used a processor.
Also I have two large full size main speakers, but most soundtracks are not mixed to take advantage of two large side channels. Most info happens in the center channel. So my main speakers never get used to their full potential. Also the processors I have used always seem to take info away from my speakers and send it to the sub. I used full range speakers on all channels of my previous home theater but the processor would never let them sing like they do in plain stereo. I did A B comparisons and in processor mode the speakers always sounded less than full range. Even if I manually went in and set up the menu, I figured it must have to do with the processing protocols.
The other problem is, once I had all things set up and sounding decent with one movie, all channels at the right level etc. I would pop in the next movie and would have to go back in and change the channel settings again because the surround is too soft or too loud, I guess just because of the way it was mixed.
Then there is the constant, or I should say inconsistent standard of audio. I had my system set up like a 7.1 system, side and rear surround plus mains. But when they release the new movie with HD sound it was only 5.1, then the next one is 7.1 but wait then they release the worst 6.1, 6.1? So when I watch Star Wars I only get one rear speaker working? I have to move the speaker to the center of the back wall just for this movie?
I got so tired of it, I love tubes and used Tube amps on all my channels in my home theater, I had 5 tube amps. I came across the Decware multi channel tube Pre-amp and was about to buy it, even tho it was not set up to do 7.1, anyway I had an injury that had me stuck in bed for two months, during this time I had a temporary system set up in my bedroom that was a simple two channel set-up. Wow, changed my life forever, as soon as I was well enough I sold all my home theater gear and invested In a very nice hi-end 2 channel system that blows away any home theater I know of personally. Of course, this is just my ears and my opinion.
I will never go back to Home Theater.
Processors I have used over the years include, Cary Cinema 11a, McIntosh MX-119, Outlaw Audio, Marantz, Kenwood, Rotel.