At what point is an external D/A converter warranted or beneficial

I think all this talk about AC power and better wires is beside the point.

I think I was in a similar situation.  I listen mostly to classical music and had a hard time getting a digital system to sound anywhere close to as good as my analog.  Classical is audio's toughest test.  I went from Philips (heavily modified) to Lavry to Oppo.  Improvements, yes, but mostly they remained unused.  I am interested only in 2 channel.

About 18 months ago I took a chance on a very reasonably priced Chinese import.  Very large power supplies, dual ES9038 chips, discrete analog section.  The DAC gave me what I wanted, a sound that was as good, though not identical, to what I was experiencing in vinyl.  I have since been building around this DAC including the ripping of CDs and SACDs.  I write this only to let you know that there are now DACs out there that will, I think, do what you want.  I am not here trying to promote a particular DAC, as I'm sure lots of people will chime in with suggestions.

But digital has come a long way.

@geoffkait , love your comments. I feel privileged to be on the receiving end of one. I do agree with you some of the time. Like this time maybe, but no, they are doing as designed. Not the best I'm sure but better than nothing.

The pleasure is all mine.

The Oppo is probably the weak link in your digital chain.  You could send the signal out to an external DAC and hear some improvement in SQ.  A better and more meaningful upgrade would be to get a dedicated high quality CD player.  There's a significant difference in sound quality when playing CD's from my Marantz KI Pearl vs. my Oppo UPD-203---->Aurlalic Vega DAC.  Using the Auralic's DAC is a little better than the Oppo's DAC, but the Marantz is much better.

I won’t go down the rabbit hole of pretending one format being superior to the other.  Making some assumptions here:  you have a home theater set up; you are taking the digital out (optical/RCA/HDMI) from the Oppo-103 and processing via the Lexcion MC-12B (2-channel stereo mode).  Not sure what kind of bass management/filtering you might have, but hope there is nothing there mucking with the sound.  The Oppo BDP-103 actually has a pretty nice DAC.  For comparison purposes have you tried listening to CDs via the RCA outputs (don’t think you have XLR with the BDP-103)?  In the past I’ve had both an Oppo BDP-105 and UDP-205 in my system running balanced XLR into a 2-Channel amplifier with very nice results.  My gut instinct would be that the Oppo unit should give you better sound given the age of the chipset used in the Lexicon, but you have to decide with your own ears.  I’ve heard that B&W speakers to some can sound a bit bright (very analytical) which would be a bad combo for a recording that has a bright/edgy quality to it.  Switching to an outboard DAC could yield significantly better results depending on what you get (and if matches well with your system).  I would suggest auditioning various options to get a flavor of what is out there.  I have a PS Audio Directstream DAC which I highly recommend, but there are other good options out there as well (i.e. Mytek, Chord, Bryston, Schiit, etc.).  Do the internal checks with your current system first, and then audition some DACs - but don’t throw away your CD collection!