Any DSP device to accomplish the same or more would require additional A/D/A conversions which would be redundant and compromising.
I am not aware of any current consumer HT multi-channel source that is not digital (DVD, SACD).
It begs the question as to why would you use analog bass management or combine analog signals to generate a phantom center channel when digital processing is much more flexible, precise and low cost (can do almost anything mathematically that software will allow).
As for A to D conversions - these can be done extremely accurately and without loss/compromise, given today's electronics (for example you want to get bass management from two channel analog data from an old analog two channel source such as a casette deck or TT). However, for digital devices, taking a digital out to a DSP from a digital source is probably the most sensible option rather than an A to D conversion.
Personally I don't think the compromises are so significant as the limitations of an analog filtering circuit and analog mixer. I don't have a stigma about digital being bad but I understand that many audiophiles feel that digital is the dark side...if you feel digital is the dark side then I agree that you should go with an all analog setup.