Big source improvement using CD player

I don't know about the Bluesound unit specifically, but, an all-in-one ripper/storage/streamer should be able to deliver very good sound.  I personally would prefer something with more storage than 2 TB, and I prefer something that allows the CDs to be ripped to WAV files, but the Bluesound looks to be something to consider.  You will also need some kind of portable drive to back up the 2 TB internal hard drive so that you won't lose everything when the internal hard drive fails (an almost inevitable event over an extended period of time).

A dedicated streamer/server can be at least as good as a very good CD player or transport; the sound quality will be mainly dictated by the DAC you employ to turn the bits into music.

I have found that it is not so much the medium as it is the particular mastering.  A lot of streaming sources do sound bad, but then, so do a lot of currently available CDs of the same music.  In many cases, older CDs sound WAY better then current reissues.  It comes down to how the digital mastering was done.  That is one of the reasons why certain CD reissues command exorbitant prices on Discogs, such as Japanese reissues.  

I think it is worthwhile having a CD player and buying used CDs; they can be quite economical to collect.  But, I don't think one loses any quality by ripping the CD to put on a streamer/server.  The sound quality of a server can be as good as that of a CD player and a server makes your collection much more accessible and convenient.  Also, streaming services can give you access to way more music than you can possible own, even though quality is sometimes not ideal.