The whole process of evaluating the sound of anything (as good or bad, better or worse) is tied into a historical context of what we have come to expect certain things to sound like. There is a certain sound of drums, for instance, that we "like" to hear when we listen to a pop recording. It may only vaguely resemble the drums that we hear at a live concert.
In that context, certain amounts of tape compression and analog distortion have become part of the definition of what we consider to be "good". The problem with digital is that we then have to go spend all kinds of extra bread on plug-ins and outboard gear (like the FATSO) to try to emulate the tape compression and analog distortion, or else it just doesn't sound quite "right". However, the real problem is none of these plug-ins or outboard pieces usually result in a 100% convincing emulation.
The other problem with digital is that you can do it very cheaply and conveniently, but the cheap and convenient systems sometimes introduce other problems that our ears can find unsettling or disturbing. Questionable converters and filters, jitter, rounding errors, poor cabling and connectors, etc. all can have a very unaesthetic effect on the sound.
All that being said, the bright side is the technology keeps getting better and cheaper, plus higher sample and bit rates are also narrowing the gap.
I use digital because of the convenience, editing ability, and economics. But I'm not blind to the fact that it's not quite on a par with top quality analog yet if you are strictly considering sonics.
