As far as why DSD, just look at a sine wave as described in 24/96 versus DSD. It's the closest thing we're going to have to a noiseless 1 inch analog you can slip into your pocket. I was about to drop a grand on the TASCAM HD-PS2. I'm going to wait and see now.
Welcome to TS!
And as far as why NOT DSD... How the f do you LOOK at a DSD sine wave? I'm serious... How can I actually do it today?
I mean, give me 5 minutes and I can write an application from scratch that will read the PCM data from a wav and plot it.. Because the format is not proprietary. I don't have to worry about how I will read the PCM masters in 20 or 30 years. With DSD, I would always need an application that could work with the latest computer hardware and OS, etc..
Also, how are people going to playback? I'm not giving up my squeezebox. So that means converting everything to PCM.
Back to your original 'viz a sinewave'... Look at a 3000hz sine wave in 44.1Khz. Even at that low frequency, very few points define the sine wave. There is the basic question of how the DAC generates the analog output from the digital input but we're straying from the core DSD issue..