My main reasoning is the clipping distortion that occurs in the D-A reconstruction (the swing of the sine wave, blah, blah...) during an analog pass. I had my suspicion about it and then I found the Aldrich papers which put it all into perspective for me - although I barely understand the physics behind it.
When I started running my own "unscientific" tests, it was pretty clear (no pun intended) - Even just on a DA/AD loop with no additional processing, the exact same signal with a few dB of headroom came out more clearly - Better highs, more focused mids, the whole 9, if they were brought to the same apparent volume after.
On "smashed" stuff, the waveform during DA reconstruction can exceed 0dBfs by 6dB or more (So, I just use a -6dBfs rule of thumb as it's an easy target and a nice safety net).
On one hand - If something is staying ITB start-to-finish for SURE, this is a little (only a little) less important. In practice, I'd love to see all digital recordings with a peak ceiling around -3dBfs or so (it'll never happen

). The problem is that ANY hot signal, during mixing if outboard is being used, during an analog pass in mastering, and of course, the final listening by the consumer (on crappy converters, normally) will have reconstruction distortion. The only questions are "how much" and "how will it be handled."
On the other hand - Some converters handle the reconstruction with much more finesse than others - Lavry being my favorite so far. This was the first thing I tried on them. They're my favorite for several reasons, but the full-scale loop test blew away my Apogee stuff... And everything else I had.
On either hand - I see this as a win-win situation for the most part. First, the DA construction is much cleaner. If that isn't enough, I've found that once most people stop worrying about hoarding bits, they concentrate on better sound - whether they realize it or not, they're making better recordings. That's good for everyone.
[EDIT] I see that Brad's been here during my typing - He's probably much more qualified to explain the previous than I am. I also dug up a link to Nika Aldrich's paper explaining it for the most part (I suppose I should've just looked for this before and saved us all a lot of time

)
http://www.cadenzarecording.com/papers/Digitaldistortion.pdf [/EDIT]