HDMI 1.3 Audio Signal - Good Enough, or no?

I own an Arcam AVR350. As many know, this AVR, among a few others, eschews the HDMI connection for audio (providing switching for video only), citing it as a path largely inferior to other alternatives for truly quality audio reporoduction. Even with the introduction of HDMI 1.3, Arcam stands by the decision they made with respect to HDMI 1.1 and appears to have no plans to accommodate the HDMI audio path in the near future.

My question is whether most folks think that audio quality considerations in a home theater environment are important enough such that the HDMI 1.3 audio route would be "good enough" for HDTV and HD/Blue-Ray DVD. Or, is it really only a factor if you are using the AVR with both an HD cable/satellite receiver AND a high-quality audio source like SACD or DVD-A?