I've sold the Wadia stuff for a few years now, and demo it on some high end gear. My experiences overall dictate that, in most systems, you're going to find the down side being that you'll lack dynamics and soundstage, yes, to a degree. If, like most people here posting probably, you listen to mostly instrumentals, vocals, string quartets, light classical, jazz, etc, you can probably get away with the "passive" approach, or dirrect CD/amp connection. If on the otherhand you want full bodied dynamic capabilities, and are into rock, pop, full scale stuff, heavy percussion, R&B, Metal, Reggae, world music, whatever, you'll be less pleased I think with the passive approach!..in this case a very good high end preamp will do you better justice, with minimal coloration, if any.
I've worked in many high end shops over the last 20 years, and can say this is the general trend, in passive vs active preamp dillemma...it's always a trade off it seems