The notion that the potential of a $10,000 integrated is wasted if fed with a $400 DAC suggests that the $10k integrated is doing something correctly that the $400 DAC is not doing as correctly, but perhaps a $10K DAC could do as correctly. It’s the notion that one component is more close to perfect while another is tarnishing the signal in a way that is uncorrectable by the better component. If this is so, we need to define what that "perfect" is. It would suggest some kind of pure, untainted quality of the signal is being lost by the cheaper DAC. What could that possibly be? It certainly isn’t frequency response, or phase information, or distortion or noise. I’m highly skeptical that there’s any important signal information that is being mangled by the $400 DAC (assuming it's not some peculiar design that intentionally deviates from linearity or adds distortion) that would ruin the potential of the $10k integrated. However, if the output of the DAC and the input of the receiver are not appropriately matched in terms of level and impedance requirements, then the potential of both of them could be wasted.
The Law of Accelerating Returns
I totally agree this letter from the editor of A-S.
It makes sense if you have a $10,000 high quality integrated and stick a $500.00 TT with a $300 phono section, a $400,00 Topping DAC and stream through your phone you will never know the real potential of the $10K integrated. And don't get me going on speakers.
This article makes total sense but one must live within their means.
No you do not have to spend a left lung for great sound but it all needs to be balanced.