For the past 50 years or so people have been working to optimize the sound of the hardware in a 2 channel system. They have also been working to optimize the sound of 2 channel recordings. Then a few years ago multi-channel recordings were introduced. Since everything in the past 50 years has been optimized for 2 channels, it only stands to reason that the multi channel systems will take a while to catch up. There are tens of thousands of stereo recordings and a limited number of multichannel in various formats. We still don't have standard. SACD, DVD, 5.1 , 7.1 ????????
The other factor is that to match the fidelity of a 2 channel system, the 5 channel will be about 2.5 times as expensive with the extra speakers and amplifiers. The 7 channel will be about 3.5 times as expensive. Since the best 2 channel is already very expensive, the equivalent multi channel systems are out of reach for most people.
So to answer your original question, It is not that it can't be done. It is that the hardware will be very expensive and there is at this point in time, a limited amount of software.
The other factor is that to match the fidelity of a 2 channel system, the 5 channel will be about 2.5 times as expensive with the extra speakers and amplifiers. The 7 channel will be about 3.5 times as expensive. Since the best 2 channel is already very expensive, the equivalent multi channel systems are out of reach for most people.
So to answer your original question, It is not that it can't be done. It is that the hardware will be very expensive and there is at this point in time, a limited amount of software.