As noted above, there are as many opinions as there are pieces of gear. This is my read on it: First, it depends on how good an amp you have, and how good a room you have. Does a well done amp sim sound better than a really bad amp in an awful room? Probably. Does it sound better than a boutique tube amp set up by an expert in a great room? Probably not. Second, it depends on who is twisting the knobs. Getting a good sound out of a modeler and getting a good sound out of a mic'd up amp can both drive you nuts. Good ears, good engineering, and experience helps a lot in both cases.
The hardest part is the evolutionary thing. When amp models were in their infancy, they just plain sucked, and everybody but a confused noob knew it. Then there came a time when modeling didn't suck so much, and *some* people could get a usable sound out of it *some* of the time, but most folks with a clue agreed that it didn't come near to a real overdriven amp. Then along about generation 3 (which is basically now), modeling sucked even less, and the price of a good tube amp rose to the highest levels in history, due to changes in supply and demand, and improvements in solid state amps, which often use modeling technology as well.
There is no reason, at least in theory, why an amp modeler can't duplicate the sound of an overdriven tube amp in a good room, but theory and practical application are two different things. IMHO, a really good amp mic'd up well in a good room cannot be matched by any current modeler. However, I do believe that with each new generation, the difference is getting smaller, and the price differential is getting bigger. Furthermore, I believe that a modeler run through a power amp and speakers, and then mic'd up in a good room, or a good modeling amp mic'd up, shaves the difference a little bit more. I think this is because over 60 years or so, we have gotten used to the sound of moving air hitting the element of a mic, whether diaphragm or ribbon, and duplicating that sound has proven to be one of the most difficult goals for amp modeling to achieve.
Which brings up another point- What sounds *good* is often what we expect to hear. It reminds me of a food executive in the 70's who was trying to convince me that microwave pizza was wonderful. I pointed out that it had almost nothing in common with a real pizza. He said to me,"but it's great if that's all you've ever had." I think that techno, midi, and amp modeling are creating a new generation of musicians and listeners who *expect* to hear the sound of a modeled/DI guitar. You can draw your own conclusions about whether that is evolution or de-evolution.
Myself, I use cranked up amps and modelers, but when I do use modelers, it also virtually always involves amps, speakers, and one or more mics. And I assure you- regarding the engineer referenced above who records everybody without amps, I won't be recording my next album in his studio. When somebody walks into my studio with an electric guitar, I do whatever it takes to give him the sound *he* is looking for. However, I may also record the sound *I think* he should be looking for, and then I'll let him decide. My mission is to make *my* recording with *his* ears.
As far as upgrading your modeler, I can tell you the best one-Just like the best smart phone- the one they are *about* to build.-Richie
