DAW software can do it, but most implementations I know of have until recently have been awkward and not really very well thought-out, or only well implemented in the more costly versions. I use Samplitude V10 Master which has limited channel counts, some decent matrix surround support, DVD-A burning, etc. , but the strong multi-channel implementation in that version was in their way too expensive professional Sequoa version. I have an upgrade to their newer Samp Pro X, mostly due to the elimination of the track limits and the far more robust surround support that trickled down since, but haven't really used that yet. Reaper support may be good, haven't looked too deeply since I'm already in the Samp camp.
I mostly use the DAW for mixing to two-channel. I have some surround projects stored as Samplitude native VIP projects played directly from the DAW, which work from the raw track files. Once fully edited I'll probably store the finished output as multichannel FLACs, playable through Foobar or whatever. Multichannel FLAC > analog out through a multichannel soundcard / or direct PCM out over HDMI. But most of my current surround playback is still hardware based, files transferred back to SD cards put back into the multi-track recorders for playback, through hardware EQ and delay if that's necessary and not available on the recorder. Works at home, sound quality is great, but its clunky and not easily transportable or share-able.
Encoding to other than FLAC (various flavors of Dolby/DTS are the obvious options) is a whole 'nother can of worms. Encoding software costs money, a lot for the new lossless formats with high channel counts, but not overly cost prohibitive for traditional lossy 5 channel DTS last I checked. Might be able to do it on the cheap with Dolby Live or whatever they call the real time encoding output option targeted at computers and game consoles (also a DTS version). I've done matrix encoding for mix-down to 2-channel, not using the official Dolby or DTS encoders, but either the matrix surround mode in Samp or simple delays, stereo over-widening, and phase manipulation. Decodes pretty nicely through PLIIx or NEO6, but the discrete playback is superior. It's an easy way for stereo compatibility though. I once looked at picking up a Lexicon home theater receiver which had the option of Logic7 matrix encoding on it's SPDIF output from a 7 channel analog input.
VST plugin multi-channel support has slowly grown far more common.
The most likely future of all this is probably not multichannel speaker playback so much as headphone-based surround visualization with head-tracking. I can see that being far more likely.
Statement: most amplified PA mixes are barely stereo mixes.
Two ears, two speakers, two mics. = I'm good
In many, the mixes are mono. If you're being blasted by a mono PA mix, how could surround recording be of much benefit?
A single solo performer without a PA is a mono source. An important question I think is this- Can the acoustic experience of listening to that solo performance in a live-acoustic performance space be recreated well enough to completely convince a listener willing to suspend disbelief so that the listener experiences the reproduction as if transported back into that original performance space, by way of a mono recording? A stereo recording? A five channel recording? Seven? The answer is subjective and partly depends on the listener, but is also based in acoustics, the mechanism of human hearing, and how robust we'd like the recreation illusion to be.
If anyone cares to hear more about my experience with recording setups for 5 up to 8 channel playback I'm happy to share what I know. To repeat what I mentioned earlier, I really don't expect anyone else to try any this stuff. I'd expect if anyone is interested in discussing it, it would be simply based on a technical interest. It's obviously something which interests me a great bit and I get a great deal of pleasure from, and that's enough for me.
There's nothing at all wrong with stereo, or mono for that matter, or enjoying either and feeling no need to go any further. Things are far simpler that way!