Freelunch,
IIRC the SD7xx is about 10 times the price of the M10, and it is not exactly pocket-sized. But even the 7xx will have some way to change the input level, and this will be in the signal path!
I know of two fundamental ways to handle that:
1) preamp with variable gain into an A/D converter with fixed gain.
This is the preferred solution for devices running with low power supply voltage for the audio stages. I suspect that the M10 uses this approach, since the D50 uses that, too. And as a designer, I also tend to recycle proven circuit blocks. My old Uher Report 4400 reel to reel recorder also uses this approach (it is 6V powered, no DC/DC-converter back then).
2) preamp with fixed or switchable gain followed by an A/D converter with built in PGA (programmable gain amp).
This requires a preamp with a high supply voltage to get the necessary headroom. This is the way how it was done in the Sony TCD-5M, that mic preamp runs at +5V/-7V. The old WM-D6C uses a similar approach, also with a rather high voltage for the mic preamp. The SD 7xx uses a bigger rechargeable battery and has phantom power, so a preamp with high supply voltage should be no problem at all.
The problems if you use solution 2) with low supply voltages can be readily observed on the Zoom H2: there are settings where the preamp clips long before the A/D converter, even when you turn down the gain. It uses an A/D from TI with built-in PGA, that also does AGC, limiter and compressor in the PGA (there is a TI application note covering that). Personally, I do not like the stepped gain of most portable recorders, and I am not alone in that regard.
There are pots that are of good quality, even in the consumer market. I personally would prefer low-noise conductive plastic ones (Vishay), but they are expensive. At least in my old Sony recorders (the above mentioned TCD-5M and WM-D6C), the gain pots still work as new (which is not true for tape heads and drive...). If the PCM M10 develops scratchy pots after 15 to 20 years, I would not complain. I still remember what I paid for the two tape decks (and the Marantz CP430...). Compared to that, the M10 is a real bargain.
Greetings,
Rainer