Do I really Need a Digital to Digital Converter?

Do I really need another piece of gear and another set of cables to clutter up my rack?

If you’re interested in better sound, unfortunately yes you do.  I have the same DAC and when I bought a used Iris (you could also get the Musician Pisces that’s very similar and cheaper) to take advantage of the Pegasus’ i2S connection the sound quality improved significantly — I would’ve had to pay a lot more for a new DAC than the cost of the DDC to get the level of improvement I got.  And that was just using this $6 HDMI cable from Monoprice (I got the 6” version as the shorter the better for i2S and under a foot is recommended)…

https://www.monoprice.com/product?p_id=13578

So my questions are, if what these DDCs do so important, why aren’t they built into into DACs or Streamers in the first place. Are they only incorporated in higher end digital gear but not gear at the level I am using?

Bingo.  Hope this helps.

Not really.

At most, a USB isolator may help in some situations when galvanic isolation isn’t built into the DAC, but what I’ve seen is that you may make things sound different by exchanging one set of jitter for another. That is, you can see the jitter signature change, but rarely is it "better."

DACs made in the last 10 years have fabulous jitter elimination built in and USB asynchronous is usually the best. Also, old DACs performed remarkably better with high frequency signals than they do now. That was another reason to consider an extra external devce, like a sample rate converter like the Wireworld Remedy. Works wonders on old DACs but not really helpful anymore.

The only real use I can imagine with a modern DAC is if your DAC lacks asynchronous USB or streaming. Another possible benefit would be galvanic isolation which, ODDLY, not all DACs have built-in, like these:

https://amzn.to/46ZhIKO

USB isolation can be really helpful when streaming directly from a PC.