So how can a great system solve less than great recordings

My goal for a system is accuracy.  If the original recording source was poor, I prefer the system that reveals that.
if I want a system that buries that under a pile of distortion and artifact, I would go back into vinyl 

Some of my best recordings are from the 50’s, 60’s, and 70’s. They knew how to record and master back then, today it is mostly a lost art and most remasters suck in my opinion. So, in answering the question in regards to making old recordings sound better, they already do sound better! Let's take Nancy Sinatra's LP County My Way for instance....I do not think it can be bettered....it sounds simply gorgeous on my system. 

I think that a lot of music is produced for radio or mid-fin listeners.
Someone has to be particularly focused on producing audiophile quality for it to happen. Since the audiophile community is a small percentage of the audience it isn't a big priority.
Most music I used to like seems to have little dynamic range and limited use of soundstage and imaging.. Sadly I often play music I'm only half into because it is recorded really well and sounds great.

Mediocre, bad or not so ideal recordings can sound confused, lacking in life and in some cases are barely listenable in lesser systems.
Same material on a better system transforms to something with a meaning with an easy to follow performance and substance.
Compared to the majesty of what a great recording offers they are lacking but at the same time you realize that your music collection has grown considerably.