Performance/dollar is, in general, a logarithmic curve, meaning doubling the cost is not going to double the performance. So there is an argument to be made that anything more than a $20 USB DAC is diminishing returns.
But I think what the OP is asking is when the cost increase does not justify the performance gain. I think this is a highly individual decision. I agree with previous posters that the investment in the DAC should be balanced with the rest of the system. It's unlikely that a listener with $2500 speakers and $2500 preamp/amp is going to be able to appreciate the improvements provided by a $10,000 DAC. On the other hand, this may be well worth it for someone with a $30K+ system.
If digital is the only source, it probably makes sense to invest a bit more in the DAC, but it's still got to be a balanced system to justify the investment.
DAC technology is probably changing faster than other components, so unless the buyer is not worried about cost, I'd recommend being a bit more conservative with the DAC purchase.
For me, where digital is my only source, I don't think I'd spend more on my DAC+streamer than on my preamp+power amp or my speakers.
But I think what the OP is asking is when the cost increase does not justify the performance gain. I think this is a highly individual decision. I agree with previous posters that the investment in the DAC should be balanced with the rest of the system. It's unlikely that a listener with $2500 speakers and $2500 preamp/amp is going to be able to appreciate the improvements provided by a $10,000 DAC. On the other hand, this may be well worth it for someone with a $30K+ system.
If digital is the only source, it probably makes sense to invest a bit more in the DAC, but it's still got to be a balanced system to justify the investment.
DAC technology is probably changing faster than other components, so unless the buyer is not worried about cost, I'd recommend being a bit more conservative with the DAC purchase.
For me, where digital is my only source, I don't think I'd spend more on my DAC+streamer than on my preamp+power amp or my speakers.