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

Invalid, Its a newer Krell 200 watts per ch amp with only about 50 hours on it, although it was made around 2010. 

 Wow, 400 watts for 802D...

Thank you for that suggestion!

Overthemoon, you are right about quality of sound - I do prefer the smooth class A Krell better, but as someone mentioned, 802s are hard to drive, so not as dynamic and satisfying. 

I will try swapping gears and see where that leads me - Thank you sincerely to all who is helping me out over here, because I never really enjoyed my main system as much as I want to or should, considering the hefty investment - perhaps its the synergy issue that someone brought up...

I'd suggest bring the Klipsch into your main system and see what you think.

Could bi-amp with a class A/B amp on the woofers that can handle your impedance dip, leaving the class A to work its magic on the mid/tops.

The onkyo m-306 is a preamp not a power amp.do you mean the 506?

I agree with @russ69 . My experience is that B&W speakers, while extremely highly resolving, tend to err on the side of brightness. Many people pair them with high powered tube amps for that reason, McIntosh being the classic pairing. The Krell, while it's giving you tons of detail, is probabky just not a good match because now it's all detail but the "music" the "feeling" is all gone. You're getting all of that on spades with the high sensitivity Klipsch being run with lots of power. Listen close and I bet a lot of the clarity and detail is gone though. Find yourself some nice big tube amps and you'll be a happy man I suspect.