Unsound,
OK, but how does that compromise my point?
With headphones, the spatial cues are still in the recordings and location is not reproduced like the original. Call that omission or distortion, take your pick.
Here is the wikipedia general definition of distortion:
"A distortion is the alteration of the original shape (or other characteristic) of an object, image, sound, waveform or other form of information or representation. Distortion is usually unwanted, and often many methods are employed to minimize it in practice."
I think this supports my point, not compromise it.