The Evidence Masters are an exceptional speaker not "most speakers". Compression is a huge issue in speakers....at elevated levels (say peaks of 95 db+ at the listening position) the cones quickly exceed Xmax and you get all kinds of compression as well as distortion. The voice coil heats up also adding several more DB of compression. This produces a very dull and distorted sound at realistic live music levels - even if you have a humungous amplifier! If the speaker is heavily compressed and distorted then it is also unable to produce low level sounds simultaneously with loud sounds (distortion can bury the soft sounds). Furthermore the background noise floor may be somewhere approaching 30 db in a fairly quiet environment, if 95 db is where the speaker starts heavily compressing then this is a mere 65 db dynamic range above the noise floor in the room....nowhere near the theoretical 96 db of the CD across the full frequency range.
With Speakers like the Dynaudio Master you may approach the dynamic range of the CD, as these will play very loud and will not compress like most speakers. (120 db uncompressed peaks less 30 db noise floor is close to 90 db dynamic range) Note that Dynaudio have only sold 1500 of these speakers - so this is NOT most speakers!
I agree the human ear is an amazing device, and yes after time will compress its own dynamic range in the presence of high rms acoustic energy
The ear hairs move around in response to accoustic waves....this triggers nerve bundles that send impulses to the brain. Inherently the system is "digital" in the sense that it takes time for nerve bundles/hairs to reset...this means that loud sounds and sounds of certain frequencies will mask other sounds. The issue is extremely complex but has been extensively studied....some of the amazing compression algorithms such as MP3 exploit the digital features of the ear by leaving out stuff that pyschoacoutics has shown that we can't hear or are least likley to hear (due to masking).
When a speaker starts distorting like crazy or you have oodles of harmonic distortion then this will also begin to mask stuff that the musicians/soudn engineer intended you to hear. Careful selection of timbre, arrangement and selection of instruments, microphone placement, expert adjustment on tonal balance (EQ), reverberation and dynamic range are what allow you to hear the most in a musical piece with your digitally limited hearing!
Check out Grace Jones "Slave to the Rhythm - Hot Blooded Mix" for something that is astonishingly audible.