Many factors, I believe.
Same brand synergy is definitely part of it. Along the same lines, I'm hoping to get the new TAD preamplifier C700 when it appears next year. Then I will have a complete TAD system, apart from the Taiko Extreme server/streamer.
The D700 has a true balanced output, whereas the Nagra HD DAC X did not (so I used a RCA cable to connect it to the preamplifier). When I compare, I definitely prefer the balanced output, it has more body, dynamics, bass, room ambience, and stereo separation. This is not a case of comparing a well thought out and implemented balanced output with a secondary unbalanced, RCA output, since the Nagra HD DAC X has a single ended circuit, and is a true asymmetric unit, where the RCA output would be its primary, highest quality output.
Although my Nagra HD Preamplifier HV also is single ended, it has an input transformer for true balanced inputs, and a stepped output transformer (which is also the volume control, hence the stepping) for true balanced outputs.
The future TAD C700 preamplifier will have true symmetric circuits as well, I can't wait to hear that.
Also, for the TAD D700, I have changed both the power cable (previously the Audience Front Row) and the signal cable (previously Cardas Clear Beyond) to the Absolue Créations TIM Absolue (their new top of the line, not yet listed on their website). I really like these cables, very musical. I won't change the remaining signal cable (preamplifier to power amps), which will stay Cardas Clear Beyond, or the other power cables, which will stay Audience Front Row, since the current mix of front end Absolue Créations and downstream Audience + Cardas seems to be exactly the right dosage (like making fine Champagne) for me (at least for now).
I'm currently using the Shunyata Omega AES/EBU cable from the Taiko Extreme to the TAD D700, but, since I just received the Signal Projects Avaton AES/EBU cable (from Greece), I will try that in my system tomorrow.
I don't mind that the TAD D700 only has an AES/EBU (or RCA) digital input, and doesn't have an USB input, since my experience over a year with both Shunyata Omega AES/EBU and USB (exactly the same 1.5 meter lengths between the Taiko Extreme and the Nagra HD DAC X) clearly showed that AES/EBU is far superior to USB (more body, more musical), at least in my considered (subjective) judgment.
Also, an USB circuit in the D700 would have added a lot of computer noise to the unit, which I can do without, so I am very happy that the D700 does not have one. I see that Berkeley Audio Design took the same approach with their Alpha DAC Reference Series 3, which also deliberately left out an USB input. If one insists on using an USB input, the Berkeley Audio Design Alpha USB unit will convert USB to AES/EBU.
I use the TAD D700 both as a CD/SACD player and as a DAC. It's working wonderfully in both roles.
The TAD D700 and the Absolue Créations cables are still breaking in, so there is more to come.