A lot of people haven't been exposed to a true hi fi system. To be fair, I hadn't really either, until I started putting a system together. My system is based on a very low budget, with some swap meet, thrift store, and Craigslist finds, and it's worked out extremely well. Hunt and you will find deals, they are always out there, you just have to look often.
I think there still could be a future for DVD-audio (or at least video DVDs with high res music) with all the home theater systems out there. Even if it's people buying/downloading lossless 24 bit music and burning it to DVD-R to listen to on their home theater system, that's a lot closer to a "hi fi" experience for sure.
All it would really take to fix the problem is for Apple to put better converters in the iPod, since the iPod has always supported lossless audio and 24 bit. Would be cool if they did this with their "buddies" at Apogee...