Ah, feels like we've been down this road before.
There are those who won't believe, those who will believe, and those who know. Let me say it is possible, and two channels is all it takes to create a sound that provides the illusion of a performance wrapping around you. It is possible to have an amazing representation of an orchestra in your living room. As in, the walls have disappeared, and you are sitting in the actual space.
Yes, you can also have a cathedral in your living room. St. Florian church, to be precise. Boulez conducted Bruckner's 8th with the Vienna Philharmonic in a church, and it is an immersive experience. I can hear the sound coming from the sides and the sense of space. There's a brief video on youtube:
http://www.youtube.com/watch?v=4VMvdQuaZnc (or search Boulez and Bruckner).
As Myles says, many have never heard such a system. Eliot has. Frank has. I have.
I still recall several years ago, a demo in the basement at GTT Audio. Big room, big Kharma speakers, big amplifiers. I put in Wagner's Gotterdamerung. I swear to God the entire orchestra and chorus were in the room. It was uncanny. I could feel their presence. They had weight. I don't think I'll ever forget it. It was absolute sound. It was probably better than my system, but I cannot fit big Kharma speakers in my room, so what can you do?
When people come to listen to my system, I hear tales of their first properly set-up Avalon experience. Even if it was 10 or 15 years ago, they remember the epiphany of having an image that totally locks into 3D space.
Again, speakers, source, and incredible attention to power. You need resolution, full bandwidth, and low distortion. Speaker positioning matters, too. As little as one degree or one millimeter makes a difference. My sweet spot is one foot or else the image doesn't lock.