Why do people buy preamps if they can directly connect amp to stereo source/phone/PC/tv?

Gain structure, and the Janus faces of impedence/resistance. Also known as, the rwo most oft misunderstood concepts in consumer audio! See the excellent Stereophile article linked earlier in the comments. -cheers

Once you hook up your input devices to a dsp or pre amp you will hear why.The pre amp section in most amps cant compare to a dedicated pre amp like a rotel RDP-980.That is what i run into my HK-5000 and the tone is superb.On the other hand some amps have limited inputs so a good pre amp is the answer.Colin

I wish i could post a pic of the inside of the rotel, totally amazing..i run a retro repair center and seen loads, most new type pre amps have 3-5 8 pin audio ic's, the rotel and many older units have a full pcb packed with semis and ic's.

If you have a "mid_fi" system, it's understandable why you don't want or need a preamp. If your system consists of high end gear, this is a no brainer. Presently, I'm using a Pass Labs XP20. It brings out audible details that a CD player direct to amplifier has never done. The preamp has been called " The beating heart of an audio system". Once you've heard one, you can't go back. Joe

@jnovak  +1 

Spot on !