"The simplest way for me to put it is that there's a presence to live instruments that is lacking in recorded music. "
I don't agree with this statement as a rule, but I think there are four reasons why this is often true in most peoples' listening rooms:
1. Venue. Most people do not listen to recorded music in rooms as large as live music is played in. You can't have live-sounding "big sound" in a small room.
2. Volume level. Live music is often too loud for a listening room, and we all know (or should know) that volume level is an incredibly important factor in how anything sounds.
3. Putting the usual chest-beating stuff aside that is normally posted on Audiogon, the vast majority of audio systems are not capable of reproducing live sound levels, so they can't sound live. Reproducing a solo grand piano, for example, is unlikely to sound realistic if you have a pair of 10" woofers that have to reach well into the midrange.
4. Most speakers aren't very good. They have colored frequency responses, or they have non-optimal dispersion characteristics or other anomalies that color the sound.
On the other hand, if you have a large room and large, accurate, low-distortion speakers with a lot of amplifier power behind them, on a few really outstanding recordings you can get surprisingly close to live sound. In my experience, with some solo instruments, to the point that you can't tell the difference. Of course, the difficulty of maintaining that illusion increases in proportion to ensemble size, so even chamber music is out of reach for most of us. But a solo guitar? Been there, done that, you can get eerily close.