An embarrassment of riches...
One of the great potential virtues of digital recording is the incredible dynamic range it can afford, particularly on a hi-fi designed for maximum fidelity. Indeed, one of the primary selling points originally in CDDA's favor (and digital recording/playback in general) was the 90dB of dynamic range afforded by CDDA's 16-bit resolution. When you consider that a 3dB change in level requires double (or half) the power output of the associated equipment, this resolution can result in tremendous dynamic range. A premium audiophile cassette deck (with decent tape) might approach 50-60dB of dynamic range, once the noise floor was factored in. Today's best phono cartridges (I'm talking $5k-$10k) might just approach that, with many "mortal" carts getting only the better of 30-50dB.
So, while HD audio formats like SACD and DVD-A have in excess of 100dB of dynamic resolution, the horrible recordings only make use of 3-9dB, never mind MP3's or what not.
Indeed, audiophile LP recordings, on appropriately high-end equipment, wipe the floor with today's "HD" digital formats for just that reason. Many analog houses realize that their range is limited and do their best to maximize what they have. Some publishers like Telarc, BIS, Mobile Fidelity, and other's (mostly out of Japan) do take digital seriously and release material that can more fully utilize the capabilities of digital formats. One piece in particular that comes to mind is the (in)famous Telarc recording of the 1812 Overture that actually came with a warning label because of its dynamic range- people would turn up the volume during quieter passages, but when the canons sounded, speakers would hyper-extend, amps would blow up or go into protection mode. Recorded without compression, it took advantage of nearly all of the nascent CD's resolution and dynamic range. Sadly, many publishers like Telarc feature catalogs limited to classical and Jazz recordings, or rather obscure indie artists. Much popular music would not benefit much from such careful mastering in any event, but there is a good deal of it that would.
Audiophiles for years have been lamenting the degradation of recording quality, and the acceptance of just-good-enough releases. Stereophile has had many articles and papers on the subject.
But, as long as Joe-Sixpack feel's his 256k MP3 is good enough, the loudness wars, regardless of who is involved, will be one of attrition.