Help me make sense of this - Midfi system sounding better hifi.

The Klipsch is more dynamic than the B&W?  Who would of thought.

Why do you call the system mid-fi?  High end is more a frame of mind coupled with a methodology.

If it was me I wouldn't feed the 802s with a Krell, I'd want something much warmer sounding. 

I think folks often overlook component synergy and often assume putting together several expensive components - amp, preamp, speakers….has to result in great sound quality.   I had a fairly costly system (from my point of view).  Well over 10k years back and it was well matched and sounded good (as per several of my audiophile friends and myself).  Sold it all.   Years later decided to jump back in on a shoe string budget.   I bought a used Rega Brio integrated, a pair of Tekton Lore speakers, and a Schiit Dac, older NAD dvd as a transport.  I spent about $1200 total and I could not be happier.   The components match really well and honestly I don’t miss my prior system at all.   

If you want to find the weak link in your expensive system, why don’t you start swapping gears one by one, from the cheaper system to the expensive one, starting with the speakers then the amp and so forth. If that’s not conclusive, try swapping from the expensive system to the cheaper one. I am hoping that only one thing is at fault but it could be more. Now, keep in mind that your thesis that an expensive system should sound better than a cheap one might not be right. Please keep us in the loop. 

Heartfelt thanks to all who helped me out here...If I can get my main system to sound better, I would be a happy camper indeed! 

Please keep the suggestions coming if you can add something - surely appreciate your expertise.