See the below link for a further and lengthy discussion on this and other approaches to removing a preamp from the chain.
http://www.high-endaudio.com/RC-Linestages.html
Another approach I have tried with the Mytek Brooklyn DAC is to use it for a preamp, removing the ARC LS-17SE from the chain. This DAC has the necessary setup (volume controls, etc.) to allow for this approach. Although it sounded pretty good, I reverted back to using the ARC LS-17SE as it had more inputs and a more natural soundstage and warmth. I suppose I could live with the Brooklyn DAC as a preamp but since I have the ARC unit I will periodically experiment with it vs. the DAC as a preamp.
I am not aware of any ARC preamps which allow a complete bypass of their circuitry, only a home theater processor button such as on the LS-17SE which allows for a bypass of it's volume control to allow a separate home theater processor to control the volume.
Although in theory removing things from the audio chain should improve sound, in practice this may not always be the case.