DAC chips definitely have reached the stat of diminishing returns. However when you buy a DAC (or CD / digital player) you buy much more than the chipset. You buy an analog amplification section that converts the digital output into a useable analog signal.
It is the parts and circuitry within the analog amplification section that makes a DAC / digital player sound superior.
Look "under the hood". You want to see big r-core or toroid transformers and a good set of storage and filtering capacitors.
What this gives you in a DAC or player is a more robust, clean dynamic exciting sound.
It is the difference between a dull anemic sound that just sits there in basic DACs and players that is not a diminishing return. Listen for a muscular sound that is more like live music. .