TBG, I agree with your take. I'm sold on native DSD being better than PCM, and I am confident there is a large latent market waiting for the software to be released at a reasonable price. I am just afraid that there is a narrow window for capitalizing on that latent market, and I fear, with good reason, Sony is once again poised to snatch defeat from the jaws of victory. I'm a Cleveland Browns fan, so I am an expert in reading the signs!
Equipment like the new PS Audio DSD DAC and Sony's own HAPZ1, not to mention other similar devices, may make the difference in downloaded native DSD and DSD converted on the fly too small to justify buying the native DSD at a premium. Based on my listening with my ModWright Sony HAPZ1, I just don't see the price differential being worth it.
If my assessment of the difference between the DSD master of Ma's Appalachian Journey is typical, the DSD master is like 1.03 compared to 1.0 for the AIFF redbook up sampled to 2 x DSD by the MW Sony. The DSD is $25, the redbook CD was $7.00 shipped. I have a large budget for new music, but it is a budget, and I can buy a lot more music, with a very small sonic compromise. They are going to have to offer more music at a better price and do so quickly, or people are going to move on.