The reason a preamp processor and separate power amplifiers are suggested for hifi applications over a AVR is...
- The preamp processor (no built in amplication) is usually a ground up designed flagship product from most brands with the best preamp sections, dac implementation, streaming function, dedicated power supply, etc. It can still be relatively affordable because it gets subsidized by the higher end HT guys (markets of scale).
- You can connect it to the best power amplifiers (depending on your budget). The primary weak link in an AVR are the compromised power amp sections crammed into the same box, injecting noise everywhere...downgrading the upstream components and everything in the box, brings everything down.
By using some dumb integrated amp, you lose very useful features like bass management, peq, etc (that the prepro came with). You will find it very difficult to integrate subs correctly and so on with a purist piece. By deploying a high quality preamp processor paired with hifi power amplifiers, you can achieve very good results when running it in stereo mode as well.
Get a prepro from a good brand and use the best power amps you can afford for the front left, front right and center channels. You can get by with some power amp compromise for the surrounds and height channels.
Refer to my room 2 system for a ballpark on what can quality as both a hifi 2 channel and multichannel hybrid system.
(Sky’s the limit if you have less wallet restrictions, of course).

