surround processor?

To follow up on MC, I have been deeply involved it the creation of world class multi channel HT where just the room was $250K ++.
Especially so, I have never considered any other than two channel.
To create an audiophile level HT indeed takes hundreds of thousands. Not to mention a LOT of complex gear. And unless there is a room within a room for proper speaker placement, there are a LOT of speakers scattered around the room and a LOT of cabling.
And even in the above mentioned HTs, the cabling and speakers are not what I consider to be SOTA, audiophile level. And even the amplification is not at that level. Personally, I am quite happy with my quality 2.1 channel system for Audio and HT. 

Skepticism about mixing 2-channel with multi-channel makes me think it must be imagined that a balanced connection to a preamp input set to by-pass somehow corrupts the preamp when it is used for 2-channel even when the input and the source for that input, i.e., the processor, are both inactive.  Seems like the magical thinking that's all too common in audiophilia.

It is not skepticism. If you would bother to read you would know it is experience. Skepticism is theoretical. What someone thinks. Experience is actual, what actually happened. In this case my actual experience was the exact opposite of my expectations. Any skepticism I may have had was being skeptical stereo could do the job. It was only after two full years of trying all kinds of multi-channel solutions that I came to the conclusion multi-channel is a marketing ploy and a fool's game. The primary goal of multi-channel is to sell more stuff. At this it is an unparalleled success.

Magical thinking is when you invent a narrative and then try to pretend reality will somehow bend to match your fantasy. When you do this, which you just did, psychologists call it projection.

This is especially apparent in light of your post following immediately on the heels of Mglik, an industry professional and audiophile who just corroborated everything I have been saying. Please, read what is written. Respond to what exists. Don't deny reality, go making stuff up, and then have the temerity to say the other guy is "magical thinking". 

I too believed that 13 channel home theatre systems were excessive and unnecessary, but after experiencing the additional channels I discovered they do enhance movie experience irrespective of room size as they provide a smooth transgression, rather than jumping from speaker to speaker.

What I fail to comprehend is how and why dedicated stereo system are always assumed to be better than home theatre systems in stereo mode. Home theatre systems have decent DACs and by selecting stereo mode the multi channel processing is removed.

Could it be that as soon as multi speakers are observed there is an automatic assumption the sound is always going to be inferior? It just seems irrational and I hope someone can explain it. Perhaps the issue is with the word theatre as sound in theatres is always a compromise.

Hello,
Just like MC I have tried to squeeze every two channel sound out of a surround system by itself. Some stuff helped the sound quite a bit like a better cables. Especially a better power cord. After listening to other systems at friends and stores I knew I needed to do something different. I like the Denon H3600x ($900) or the H3700x ($1100 and does up-to 120hz. In 4K) for the surround sound receiver. It is one of the few SS receivers that you can divert the amps from the front and use them for the surrounds. Then you can look for a two channel option with a decent bypass. Just so you know every time you use one of the amps inside you are probably cutting the watts per channel to all the amps you are using. It’s just plain physics. I use the Emotiva XSP 1 preamp with a Marsh Sound Design amp. It is full linear differential balanced. It even has a built in crossover for the subs. It is great for  the $1100 new price tag or $800 used. I bought mine used. This system works great. I tried the Rogue RP7 preamp but it did not work well. It loses 10db when you use the bypass feature due to you are turning the preamp off to use it this way.  I will be upgrading to the Ayre 5 series separates but my existing system is so good I am going to keep it for another room after I get my Ayre components which has HT Bypass and works perfect.  I know the best sound you can get for 2 channel is not having your HT being connected to your two channel at all. My system sounds really good even though it is all hooked up together.  You will have to decide what is important to you. 95% of the time the room is 2 channel only. My music system has gone from Meh to holy &?!@ over the past couple years. I just added the JL Audio CR1 crossover with two F110 subs. After I get the Ayre gear I should be done with the base of the system. Seriously the Emotiva Preamp is worth it all day long. If you want an integrated amp then the Parasound Hint 6 is one of the best values out their and it has a DAC and Subwoofer control on the remote. Except for the Emotiva the rest of the gear in this post can be bought from this store in the Chicagoland area:
https://holmaudio.com/
they have a try before you buy. Right now I am demoing so of the IsoAcoustic gear. This stuff is really amazing. Townshend stuff for isolation is great too. I would like to try that gear too. I hope this helped.