Pros & Cons of Buying an Integrated with Built-in DAC?

It would probably be worth trying a Nait XS or a SuperNait.  Both very good sounding, have built-in upgrade options, will last effectively forever, and have excellent support.  If you don't mind used, a SuperNait has a good DAC built in (yes, ironic in that that is one of the reasons I don't have one). 

DACs seem to outdate in 5yr cycles(with some exceptions for niche or unconventional products off-the-shelf chips are used which stay current for quite a few years.) We're at the end of the current cycle by the looks of things; the Sabre 9018 has been on the market a few years already & AKM just put out a new chip. A lot of companies seem content with refining designs based on older DAC chips.

Integrates have the advantage of short signal path & the lack of guesswork on voicing/electrical factors. Your money is also going into purchasing only one box of casing & power supply so in theory you will get more DAC for your money. The disadvantages are that companies usually prioritize the amplifier circuitry and may not be experienced in DAC design.

My thought on the matter is that if you do decide on a one-box solution shoot for something made within the last year. I'm not sure on your budget however you say the LIO is too much; by giving a miss on redundant parts(the box/psu) you may get a superior value. What it really comes down to is if you can get the sound you're after in a unit which has a DAC option. Trimming down to one box takes a lot of different implementations & brands off the list.

@redfuneral

You should differentiate between dacs being outdated from a technical perspective vs. outdated from a marketing perspective. 

If you're talking marketing, I agree.   Manufacturers have to always market the latest and greatest to create emotional reasons to buy, even if there's no good reason to.  If you're talking technical progression, I disagree.   There is nothing that has happened in the last 5 years, or 6 years, or 7 years, that would make even a 10 year old dac obsolete or even subpar.   People upgrade because they want to - it's far less often that they're upgrading because they need to.

@bcgator 

I both agree and disagree. USB receiver chips and clocks have come a long way. If you are using modern D/S chips these are imporant factors to the overall performance. This is the only kind of DAC you will find in fully integrated units.

Personally I use a R2R filteless DAC which is 6yrs old & prefer it to far newer and costlier units. However this technology has obvious testable tradeoffs for the things that it does right which are masked to some systems/ears regardless. Digital's more recent advancements are less important here simply as these designs work differently. I figured it would over complicate matters bringing this tech into the discussion as it involves niche markets or vintage purchases(and the convertex boxes which come with.)

It is much like the debates over amplifiers. Class D makes great advances every year whereas Class A sees more subtle refinements. Most everything is up for debate other than Class D amps outdate quicker simply due to the markets focus and more rapid advancements. 'Marketing' is the simple but perhaps incomplete answer.

@redfuneral

Ah yes, great point about the advances in USB chips and the adoption of asynchronous implementations.  That has been a welcomed advancement.