What component is responsible for dynamics ?

To emphasize my point. Listen to some great source music through good headphones and you will here the full dynamic range of an orchestra as rendered by the source recording. Ultra low background noise allows you to hear the softest passages and their nuance. Since the driver is so close to the ear canal, loud passages are rendered with full dynamics and no compression. No change in Cd player will render different overall dynamics (unless that player is purposefully compressing dynamics, ipods do this).

Now, take the headphones off and increase the volume level so that you can hear the music at conversational levels with the headphones 3 ft away. The overall sound will be high pitched and AM radio sounding. Why? The sound is being compressed by the physical limitation of the drivers in the headphones. All the music, loud as well as soft passages are being played at or near the maximum spl of the headphone. This same characteristic applies to speakers. Hence the more effecient your speaker are, the louder you can drive the max spl without compression. This is also the reason that speakers with large and many drivers can give you great dynamics in a good size room. Little bookshelf speakers (without a sub) cannot, but will, if played at moderate to low volume levels.

This same characteristic applies to speakers. Hence the more effecient your speaker are, the louder you can drive the max spl without compression.

you have ASSUMED too much in your statement that the amp driving the inefficient speaker does not have the current drive capability & dynamic headroom to drive that particular inefficient speaker. That is NOT always the case - there are plenty of well-made amps that have sufficient prowess to drive inefficient speakers. They might not fit your budget (or that of most people) but that's another matter.

This is also the reason that speakers with large and many drivers can give you great dynamics in a good size room.

Again, you've assumed too much by giving a lot of speaker manuf undue credit by assuming that they know how to design a multi-driver speaker. Most do not! The audio landscape & used market is full of multi-driver loudspeakers that sound blah...
There are some multidriver loudspeakers that fit your statement but it usually the exception.....

Raya,
You state a very rational explanation for the obvious advantage for high efficiency speakers. This also has been my own experience.
Best Regards,

The more sensitive the speaker the more likely the noise floor will be higher, and the softer end of the dynamic scale will more likely to be negatively affected.

Unsound I must say that has`nt been the case for me, but to each their own. What ever works best then go for it.