Which came first, the chicken or the egg

There has to be a simple reason that these setups do not sound as good on two channel stereo. I mean that a good one uses a tape loop (or bypass) and the quality electronics and speakers are in place. Perhaps just covering the screen and the center channel with a wool blanket (maybe even the rear speakers) would make the difference as the only difference that I do see (between a two channel setup) is a reflective surface (the screen) between the main speakers (this is not a good thing) and three other speakers in the room that will suck up the sound when not in use. Does anyone already do this? Or just try it at a shop and see if it improves the sound in stereo. Also I have heard that getting the cable or dish ground right can be a problem as well. I just messed around with our cable ground (which is not even connected to the stereo) and it does effect the sound of the system.

Dekay has some points there. Most of the HT systems I've seen have some big hard components in the center between the two main speakers, this is generally known not to be very good for the sound. But, I think, another major concern (besides the system ground concerns from cable, etc.) is the serious amount of extra wires, interconnects and components and their circuits. A direction that 2-channel seems to be going down, is to simplify systems. Home Theater, usually,
has many components, many interconnects...and yards of speaker wire. Perhaps it is as simple as Home Theater being able to be done well, (audio wise)..it's just harder to have success.

The room!

To have the best of both worlds you are going to have to make compromises with your room acoustics for both HT & 2-channel audio. In theory you can not have both. On HT the room must be dead and in 2-channel audio the room is live. But since you are looking to "75% home theater, 25% good stereo listening"....You should able to cross the gap very nicely. Before jumping the gun on any hardware purchase, you need to answer the following questions:

What is your room dimensions?
What is your RT60 value?
And at last, someone asked the question already, Is the video is part of the $50k budget?

The room has the most influence on any piece of hardware you can buy. You can buy the most expensive hardware known to man and it wont make a bit of difference if you have sh*tty acoustics in your. It’s just like throwing your money down the toilet! You have a lot of research to do, enjoy.

It just burns you up doesn't it Leafs, that someone could want something different from what you want.

People can make there own choices.Whats wrong with telling it like it is.Then they have the whole story.If you wish to be had by the false hype of the HT sound go for it no one is stoping you.