The AVR market is just more competitive with mainstream manufacturers having to bring new models to market every year with the latest bells and whistles. If you compare current AVR models to the same manufacturers pre-pro (providing they make one), chances are the case and chassis, decoders, HDMI protocol, room correction, etc. are all the same. The only thing that is different is that the AVR gives you up to 7 channels of amplification - for less money! Kind of makes you wonder the quality of those built in amps?
I would say though that pre-pro from the higher end companies, Cary, NAD, Anthem, etc., probably offer much better 2 channel pre-amp sections than the mainstream company's pre-pros. But this is usually not why people buy AVRs or pre-pros.
HDMI 1.4, lossless decoding, etc in an AVR vs. a pre-pro is exactly the same. The same version of Audyssey in an AVR is exactly the same as what you get in a pre-pro. Therefore with exception of the analog pre-amp sections on some high end models (and this applies only to those interested in two channel music; not movies or concerts), I would say pre-pros are not superior to an AVR.
The above is why I use an AVR with a multi channel power amp. For two channel analog, I use a 2 channel pre-amp with home theater by-pass. Best of both worlds in one system.
