The issue is not that analog sounds better than digital. The issue is that the media has it drilled into our heads that digital sounds better than analog.
However, I feel that the marketing points for digital over the past decade or so have been the amazing portability and flexibility of digital media. Analog media is simply not even considered, because the media originates in a digital fashion, and if you want to take your music with you and go jogging with it, it's a bit hard to do so with a vinyl LP. (Cassettes are an option, I know, but I'm not even going to debate that here. I think you can get decent quality out of a cassette when it's done right, but the fidelity of a cassette vs open reel/vinyl is obviously lacking.....)
Analog media is pushed so far out of the marketplace that it goes virtually unnoticed save for record stores and garage sales. Only because of moderate demand from Generation X'ers is there even an inkling of vinyl pressing still taking place, thank goodness for that...
What's my point? My point is that it is what it is. I think so much time is spent fussing over how shitty digital is, when the average human doesn't mind the "convenient sacrifice" in the fidelity of their music if that means that they can fit their music library in the palm of their hand and take it wherever they please.
I think that this debate needs to occur in the recording studio, not the consumer side. Consumer digital media is here to stay, and let's face it, analog will never outweigh digital media in popularity. (unfortunately). But professional recording studios have the ability to make a difference, however minute, when the master recordings are made. Here is the place where digital technology must be scrutinized, and analog technology must be strongly considered. Who gives a crap if a week-long recording session can fit on a hard drive? Is it really that much more convenient than 3 or 4 reels of tape? If a record is going to sell thousands, if not millions of copies, doesn't it make sense that the master copy should have the absolute highest fidelity humanly possible? If an infinitely pristine digital copy exists, then as digital technology improves, better digital dubs can be made from the analog master.
The time and effort spent utilizing analog recording techniques in the recording studio (as opposed to digital techniques) has been proven to yield more musical results, making the end product (digital or analog) sound better. So there is the battle that should be waged, here.