over the years i've owned a number of Home Theatre processors which both process discrete 7.1 (typcially Blue Ray) and also will use DSP to give you a multitude of surround sound 'expansion' choices for music surround sound. none of them approach what a discrete music only 5.1 SACD source will give you for music. maybe by accident you might stumble accross just the right setting for just the right music....but mostly it's a mess. which is what drove me to build the room for dedicated multi-channel and invest in the effort.
the second best surround performance i've heard to SACD 5.1 was (besides Blur Ray concerts) certain redbook dics encoded with DTS and AC-3 surround matrixes which did give you some quite good sound....depending on the mix.
the real problem with any surround approach is how a playback system blends with the mix.
how is the deep bass handled?
how well integrated are the subwoofers with the main speakers?....and will the low frequency channel mix match that separation?
does the room use absorbtion (preferred for movies) or diffusion (preferred for music) for multi-channel?...and how might that effect separation?
how much rear gain is needed?....will the mix match that?
if the surround mix does not have a Low Frequency Channel how will the main speakers do with full frequency?
and on and on.
there is no real consistent standard followed by enough software producers and used by users that allows the format to mature enough to be optimized. just too many moving parts.
i can agree with all of your conclusions, but i experienced a different result.