Summitav, you make a very strong and I must say hard-to-dispute statement:
"First and foremost, "ANY" sonic artifact created "after" the recording process, in the reproduction space, cannot be reality, and can do nothing but degrade the original."
That sounds very convincing, but if it is true, then why are we not all listening to headphones? With absolutely zero degrading room interactions, wouldn't headphones be the holy grail - the "poor man's anechoic chamber", if you will?
Let me start out by noting that recordings are made to be listened to in a reverberant environment. If they were made to be listened to in anechoic chambers, they'd be mixed accordingly. (Some recordings are made specifically for playback through headphones, and I'm told that they sound wonderful through a good set).
So assuming those of us who have invested in loudspeakers are not insane (okay I know that's taking a leap...), the loudspeaker/room combination must be doing something good to the reproduced sound, else we'd all be saving up for a pair of Stax headphones.
The loudspeaker/room interface plays a major role in three critical areas: Spaciousness, image localization, and timbre. Let's take a look at each:
"Spaciousness is created by a large number of laterally arriving sound waves which are preferably delayed from the direct sound by more than 10ms. Only the reverberant field can possess this characteristic... In order to have the feeling of spaciousness, one must first be in a room location with a reasonably high reverberation level relative to the direct sound level." - Dr. Earl Geddes on sound perception in small rooms. So when it comes to spaciousness, reverberant energy is our friend.
On the other hand, early-arriving reflections are the enemy of precise image localization. And strong, distinct, laterally-arriving early reflections are unfortunately the worst offenders, tending to blur the image and even altering the tonal balance of the sound. So already we see a conflict here between the good things that reverberant energy can do, and the bad things it can do.
Timbre relates to the harmonic structure of a sound; the same note sounds different on different instruments because of their differing timbre. Room reflections will inevitably influence the perceived timbre, as the reverberant energy's spectral balance is summed with that of the first-arrival sound by the ear-brain system. The rich, lively sound we so enjoy in a good concert hall (and find lacking at an open-air performance) is largely the product of a highly diffuse, relatively late-arriving and slowly-decaying reverberant field (Pisha & Bilello on live end/dead end room techniques).
So reverberant energy does some good things, and some bad things. Generally speaking, strong, distinct early-arriving reflections are likely to do more harm than good, while late-arriving, diffuse reverberant energy is almost always beneficial in a home listening room.
Now, using directional speakers in a fairly live (yet diffusive) room can work quite well. The directionality of the speakers reduces the number of early reflections, and that same directionality builds up the reverberant field more slowly than wide-pattern speakers would. But the key thing is, the radiation pattern should be as uniform as possible over as much of the spectrum as possible, and this is rarely achiecved with conventional loudspeakers. Most of what passes for "directional" is really "narrow pattern at some frequencies, wide at others, and omnidirectional in the bottom three or four octaves". In an extreme case, such a speaker may well sound best when listened to in the nearfield or in a semi-anechoic environment.
In my opinion the main advantage of wide-pattern loudspeakers isn't necessarily in the relatively higher ratio of reverberant to direct energy; rather it's in the much closer correlation between the tonal balance of the direct and reverberant fields. This promotes natural-sounding timbre. Although there is a trade-off relationship between spaciousness and sound image localization, by diffusing or (if necessary) absorbing the early reflections it's possible to get good results in both areas.
So while it makes intuitive sense to say that anything the room does to the sound is degradation, I'd argue that the room does some very good things to the sound: It adds spaciousness and timral richness and liveliness, hopefully with minimal detriment to image localization. Indeed when it comes to votes cast with our wallets, I think most of us have voted in favor of at least some room interaction. Most of us have studied and auditioned extensively to find the finest pair of speakers we could reasonably (ahem) afford, while relatively few of us have pursued headphones with anything remotely approaching the same passion and budget allocation (or budget-busting, as the case may be).