Two observations:
1. Yes, please, let's have a thread somewhere to talk about dynamic range, mike vs. line inputs, pads on mikes versus pads on preamps, and in-line pads (an alternative which wasn't mentioned here, but is often preferable to the other two). Some of the information which people claimed as gospel truth in this thread was accurate; other such claims or assumptions, stated with equal vehemence, were not.
I wouldn't want to say that everybody overgeneralizes here, but sometimes some folks do it some, I guess.
2. If it turns out that the S/P-DIF input of this unit does something to the bits rather than storing them literally as received (and that does seem to still be an "if"), before we all condemn this, why don't we find out what it's doing to the bits? If it's removing DC offset, for example, that could be doing us a favor--or not, depending on how it's implemented. I mean, I'd prefer a straight-line approach, but not everything that is done unto a bitstream is uniformly and equally bad.
--best regards