"I too would like to know how any system can compensate for elements in a bad recording"
The teaching of the "recorded code" has been limited at best when it comes to quality of recordings. I would say we need to fault the teachers of the hobby, whom ever they are. It also seems that when it comes to compression, dynamic range and efficiencies the explanations are not in line with the actual "doing" of the audio chain. Dynamic range is not necessarily a function of recording compression (limiting) and efficiency but somehow has turned into an excuse for poor performance in playback systems. The term "revealing system" has been used as the justification of a system not being able to play a recordings content, when not being able to play any recording is a function of content being or not being in tune. If your system is not "in-tune" with recording content the music will sound "out of tune". It doesn’t matter what is considered good or bad engineering.
Take your "great" sounding recordings to another system and it will sound different (many times majorly different). Why does it sound so different is a function of system tuning. HEA got off track when they went to discrete system component matching. Here’s why, all recordings have a different recorded code and sound different from each other when played on a system with only one setting.
Let's take any recording and play it at any studio or home setting in the world. Now let's take that same recording and play it in any other studio or home setting, guess what, it sounds different. Does that make the recording or system bad? Of course not, it makes every setup different sounding.
michael