Al, the purpose of the phono is to bring the signal to line level; while a hot signal can come off the CD, it's not supposed to, because there is nothing to control volume inside the PC. The only difference this makes is that the signal is louder, not better.
The quality of the preamp is determined by how precisely it amplifies the signal it gets from the phono or CD. The quality of phono varies a great deal more than CD; that could be good or bad. When we considered BIC, Gerrard, and Dual as good TT's; they were not as good as CD; but when the expensive cartridges and TT's that are currently discussed, are used, the signal is better than CD.
That signal requires an expensive pre and amp. I think what Viridian was saying, is that he only has so many "bundles" of money; when the cartridge costs one bundle, the TT another Bundle, by the time he gets through with those bundles of money, plus bundles for the pre and amp, he can't buy as high a quality speaker as he would like; therefore he chooses a less costly speaker because he has a perfect signal all the way up to the speaker, and moderate speakers will sound good when they are presented with a perfect signal.
An expensive perfect speaker will not compensate for a bad signal, it will do what it is supposed to do, which is to turn the electronic signal it gets into audio whether that signal is good or bad; that sums up both sides of the equation, and I side with Veridian.