I agree with him about Servers and Streamers. Just so the cpu can handle the load, the bit stream entering a DAC is identical regardless of cost. The feature I would be willing to pay extra for, and can be expensive, is the User Interface or Human Interface software/hardware.
I disagree that he can tell the difference between a FLAC and WAVE file. A decompressed FLAC is identical bit for bit to the original WAVE file. Only the meta data is different. If a lossless compression does not expand into an exact copy of the original, restoring a computer backup would never work.