When 16-bit / 44.1kHz Audio was first developed, it implied a very capable system for representing high-fidelity sound. But I think that today, we live in a pseudo-16-bit era. Manufacturers have taken 16-bit components, but designed devices which do bot deliver the full power or quality of what this format once promised.
It might be a bit of an exaggeration, but
I would say that out of those indicated 16 bits of precision, the last 4 are not accurate. And one main reason this has happened, is due to compressed sound. Admittedly, signal compression – which is often a euphemism for data reduction – is necessary in some areas of signal processing. But one reason fw data-reduction was applied to sound, had more to do with dialup-modems and their lack of signal-speed, and with the need to be able to download songs onto small amounts of HD space, than it served any other purpose, when the first forms of data-reduction were devised.
Even though compressed streams caused this, I would not say that the solution lies in getting rid of compressed streams. But I think that a necessary part of the solution would be consumer awareness.
If I tell people that I own a sound device, that it uses 2x over-sampling, but that I fear the interpolated samples are simply generated as a linear interpolation of the two adjacent, original samples, and if those people answer “So what? Can anybody hear the difference?” Then this is not an example of consumer awareness. I can hear the difference between very-high-pitch sounds that are approximately correct, and ones which are greatly distorted.
Also, if we were to accept for a moment that out of the indicated 16 bits, only the first 12 are accurate, but there exist sound experts who tell us that by dithering the least-significant bit, we can extend the dynamic range of this sound beyond 96db, then I do not really believe that those experts know any less about digital sound. Those experts have just remained so entirely surrounded by their high-end equipment, that they have not yet noticed the standards slip, in other parts of the world.
Also, I do not believe that the answer to this problem lies in consumers downloading 24-bit, 192kHz sound-files, because my assumption would again be, that only a few of those indicated 24 bits will be accurate. I do not believe Humans hear ultrasound. But I think that with great effort, we may be able to hear 15-18kHz sound from our actual playback devices again – in the not-so-distant future.